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Impacts of Policy-Induced Freight Modal Shifts (2019)

Chapter: Chapter 9 - Freight Mode Shift Case Studies

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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Chapter 9 - Freight Mode Shift Case Studies." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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103 This chapter explains the case study selection process, mode shift policies, recent develop- ments, and lessons learned for each of the six freight mode shift case studies selected for this project. Identification and Selection of Case Studies Transportation policymakers are often interested in implementing policies that will create mode shift in order to realize a variety of benefits, including congestion mitigation, reduced road wear, emission reductions, and economic development. To help develop successful mode shift policies and projects, a better understanding of the factors that influence successful mode shifts and the roles that public policy can play in the process are required. The objectives of this exercise are to identify public mode shift policies, explore what contributed to their success or failure, and to derive lessons learned. To compile a list of projects backed by public policy that encouraged mode shift the research team used its knowledge of mode shift projects across the country, Internet research and a lit- erature review, and interviews with subject-matter experts. In 2014, a methodology was devel- oped and implemented to select projects for case study development. The research selected the following six case studies: • Albany Express Barge service • Palouse River and Coulee City Rail System • The Heartland Corridor • The Crescent Corridor • Chicago Region Environmental and Transportation Efficiency (CREATE) Program • Truck Route Management and Community Impact Reduction Study In 2018, the research team revisited each of the case studies to examine how the policy or project had fared over time as the project matured or became more complete. The research team left the results of the original case studies intact and presented the results of updates in two-part epilogues. The first part of the epilogue focuses on developments since the original case studies, while the second part highlights the lessons learned. This chapter includes three main sections. The first section documents the methods employed to identify case study projects. The second section describes the case study selection method- ology. The final section presents the selected case studies; the presentation includes overview, analysis, results, and conclusions of the case studies. C H A P T E R 9 Freight Mode Shift Case Studies

104 Impacts of Policy-Induced Freight Modal Shifts Methods for Identifying Mode Shift Case Studies To identify examples of freight mode shift, the research team compiled a list of projects culled from a wide range of sources. This section documents the approach, which included these activities: • Interviews with subject-matter experts, • Online research and literature review, • Analysis of the Transportation Investment Generating Economic Recovery (TIGER) grant application program evaluation database, and • Analysis of more than 30 “The Case for Freight” reports from AASHTO. Subject-Matter Expert Interviews The research team interviewed officials from government, associations, major carriers, and members of the NCFRP Project 44 panel and research team. The interviewers provided the experts with a brief introduction to NCFRP Project 44 research effort and asked them to identify successful mode shift projects. Interviewees were also asked to identify other experts who might be able to suggest additional potential case studies. Table 44 presents summaries of the interviews with experts. The table provides the date of each interview, names of the interviewees and their organizational affiliation, and a summary of the results. In total, the research team interviewed nine individuals representing a cross section of local, state, and federal agencies and private freight industry experts. The research team also suggested other project examples based on its collective knowledge of major goods move- ment projects that might offer the data needed for this research effort. In addition, several members of the NCFRP Project 44 panel provided additional feedback on an initial list of potential case studies, including suggestions for additional types, and individual case studies. Table 45 summarizes the written comments and interviews with panel members. Online Research and Literature Review The research team also conducted Internet research and a literature review to identify poten- tial mode shift case study examples. Key resources examined included: • AASHTO publications, • Transportation Research Record: Journal of the Transportation Research Board, • Reports and studies identified in the research team’s technical proposal, • U.S. DOT freight-related websites and publication archives, and • Studies and reports published online by state DOTs and private industry organizations. Key documents reviewed and case study candidates identified are summarized below. Transportation Reboot: Restarting America’s Most Essential Operating System. The Case for Capacity: To Unlock Gridlock, Generate Jobs, Deliver Freight, and Connect Communities—Part 2: Unlocking Freight In 2010, AASHTO published a study entitled Transportation Reboot: Restarting America’s Most Essential Operating System. The Case for Capacity: To Unlock Gridlock, Generate Jobs, Deliver Freight, and Connect Communities (AASHTO 2010b) and a series of companion reports entitled “The Case for Freight” that explored the issue of freight capacity and identified a number of transportation and freight-related improvement projects across the United States. The follow- ing provides a brief summary of Part 2 of Transportation Reboot, called “Unlocking Freight” that

Freight Mode Shift Case Studies 105 Interview Date Organization Summary of Results 12/10/2013 ALK Technologies This GPS/routing service/logistics company was not aware of any specific examples of mode shifts. 12/13/2013 U.S. DOT/Office of the Secretary U.S. DOT’s Chief Economist mentioned the National Gateway and Crescent Corridor as potential case studies, but cautioned that there may not be enough evidence for either at this point. He also noted that mode shift has been encouraged by relative increases in rail labor productivity and rising fuel costs. 12/19/2013 U.S. DOT/MARAD/ Office of Marine Highways and Passenger Services Identified two potential case studies: 1. Couch Lines at Port of Houston is draying containers all around the region on a growing network of COB services. The services receive no government support, but these Marine Highway Services are an example of the type of short- distance service that could become more common as congestion around ports and fuel prices continue to rise. 2. The 64 Express COB service between Richmond and Norfolk is an example of a recently established Marine Highway Service. Containers moved on this service are eligible for a shipper tax credit from the MPO. http://www.64express.com 12/21/2013 U.S. DOT/FHWA Operations Suggested three examples of documented projected modal shift: 1. NS Crescent 2. Heartland Corridor 3. CSX National Gateway Noted that railroads have identified trade lanes that they felt they could make a play in. A suggestion was made to contact Scott Greene at FRA. Other general areas where changes have been seen are the farm-to-market roads where the consolidation of grain silos and abandonment of short line service have put more trucks on the road. Another suggestion was looking into the placement of retail distribution centers. 12/19/2013 Oak Ridge National Laboratory 12/30/2013 U.S. DOT/FRA 1/9/2014 U.S. DOT/MARAD - North Atlantic 1/23/2014 Center of Excellence for Sustainable Urban Freight Systems/Rensselaer Polytechnic Institute 1/23/2014 Jack Faucett Associates, Inc. Was not aware of any examples of potential mode shift projects. Suggested the following case study examples: 1. Crescent Corridor 2. National Gateway 3. The Harlem Corridor in New York 4. Colton Crossing in California Suggested following upcoming Maine Port Authority and MARAD effort to create a Marine Highway Service, utilizing a purpose-built, container-articulated tug barge. Expects that this service will start a significant modal shift from truck to barge. Suggested exploring grain shipments that are moving from Canada to United States via the Erie Canal. In 2013, such shipments increased by nearly 10,000 tons/year. Local vehicle size and weight restrictions limit access based on vehicle size and are often implemented because of concerns about the perceived congestion or traffic accidents produced by large trucks. Reviewed the compiled list of case studies and suggested three additional examples: 1. The BNSF Intermodal service from Los Angeles to Chicago 2. The Panama Canal Expansion 3. NAFTA Also suggested regulatory policies such as hours-of-service regulations, truck size and weight regulations and mileage-based highway user fees. Table 44. Summary of subject-matter expert interview results.

106 Impacts of Policy-Induced Freight Modal Shifts identifies potential mode shift case study projects. A later section of this chapter reviews “The Case for Freight” documents. “Unlocking Freight” describes the future of the Interstate high- way system and the growing importance of freight as a generator of major traffic and eco- nomic development. Specifically, the report addressed four major topics: • The growing freight demand, • Competitiveness in the global economy, • The impacts of congestion on economic development, and • What needs to be done to keep freight on the move. AASHTO found that the need to move more freight across the country and the world would increase significantly in the twenty-first century. From 2010 to 2050, experts project freight Date Summary of Results 1/30/2014 On the case study discussion, I’d like to flag that we are not only interested in looking at the impacts on freight modal shift of policies designed or initially proposed to induce such a mode shift (e.g., grade separation or corridor improvement projects) but also other policies that may have led to such mode shifts anyway. Examples include charging additional fees at the LA ports for access during peak hours or time of day, truck pricing introduced on the bridges in the New York area to deal with traffic congestion, land use policies that restrict location of warehouses in certain areas, and access restriction policies for trucks in urban areas (in this regard, some examples from Europe may be quite useful). The task “Describe recent significant examples of freight modal shifts and their causations” implies tracing the mode shift impact to one or more policies that may have led to it, whether it meant to bring about a mode shift or had other objectives. 12/10/2013 Correlate the case studies to either intended or unintended modal shifts. Also include an unsuccessful modal shift case study. The one that comes to mind is the PANYNJ barge service to Albany. 1/31/2014 This recent article (http://www.governing.com/topics/transportation- infrastructure/gov-states-reinvest-in-rail.html) does a good job capturing how state governments often frame this topic. I also have a Georgia example. We did repairs to two short-line RR’s connecting the Port of Savannah to a new/startup intermodal terminal. The primary motivator was economic development; modal shift was a secondary (or tertiary) outcome. See: http://www.progressiverailroading.com/intermodal/news/Cordele-Intermodal- Services-to-open-Georgia-terminal-next-month--26568 1/31/2014 States such as Washington are supporting short-line railroads that the mainline railroads have spun off. This includes purchase, subsidy, as well as grant programs and low-interest loans. The Palouse River and Coulee City (PCC) rail line is the state’s longest short-line freight rail system and spans four counties in eastern Washington. In 2007, the WSDOT completed the purchase of this rail line to save it from abandonment. The state's purpose in the purchase included • Rail Access. Growers in eastern Washington asked that the state intervene to keep all of the lines operational to provide competitive shipping alternatives. The grain cooperatives expressed concern that truck-to-barge rates and truck-to-Ritzville (rail shuttle) rates would increase if the lines were not available to ship their product. • Protecting Infrastructure. WSDOT indicated the lines might be of future im- portance for emerging industries such as biodiesel. If the lines were to leave state control, it would be challenging to protect them from abandonment, which would make it difficult and very costly to re-acquire. The closure of the lines meant that traffic could divert to surface streets, with the potential for seasonal road closures, congestion, and increased maintenance costs. How should government entities evaluate the success of such projects? Table 45. Summary of NCFRP Project 44 panel member case study comments and suggestions.

Freight Mode Shift Case Studies 107 tonnage to double from 15 billion tons a day to 30 billion tons a day. The four major drivers of freight demand include the following: • Consumption. Forecasts call for the U.S. population to grow from 308 million in 2010 to 420 million in 2050. • Production. Despite a forecasted decline in manufacturing employment, growth in the ser- vice sector and an increase in technology investments will increase manufacturing output and growth in goods production. This growth in goods production will create an increased demand for transportation of raw materials, parts, and finished products. • Trade. Forecasts call for the value of U.S. exports and imports to grow from between 4.2 and 5.8 percent annually. This growth will increase the freight traffic traveling through the coun- try’s transportation system. • Supply Chain Management. Businesses are moving toward an “on-demand” supply chain where they reduce their inventory and centralize it at fewer locations. In the past, customers and businesses would tolerate delays in shipments, but they now require immediate process- ing and tracking from origin to destination. “Unlocking Freight” (AASHTO 2010b) concludes that the current capacity of the U.S. network of road, rail, and ports is not keeping pace with increases in demand. The nation’s infrastructure is aging and experiencing usage levels beyond its intended design. Highways are experiencing congestion at peak hours, which causes delays for truckers, business travelers, and commuters. Bottlenecks along regional and transcontinental freight routes are creating “corridors of conges- tion instead of corridors of commerce.” For example, estimates of truck-hours of delay for the nation’s worst freight bottlenecks indicate that each of the top 10 highway interchange bottle- necks result in over one million truck-hours of delay per year at a cost of $19 billion. Researchers examined that the freight transportation system affects economic development, job growth, and quality of life in communities. An estimated 10 million people work in the freight transportation industry. Congestion, idling, and at-grade rail crossings are detrimental to air quality and negatively impact the daily lives of people and business operations. For example, Lamar, a city with a population of only 9,000 along the Ports-to-Plans Corridor in Colorado, experiences daily congestion attributed to semi-truck traffic. The study prescribes the following actions to cope with the growing freight demand and its effect on communities: • Expand Interstate highway capacity by adding new lane lines to the National Highway System, truck-only toll facilities, and areas around key ports and intermodal facilities; • Develop a national freight program and strategic plan that fosters collaboration between multistate corridor organizations at all levels of government; and • Invest in multimodal connector improvements and increase collaboration among states, railroads, and public-private partnerships. In reviewing Unlocking Freight” (AASHTO 2010b), the NCFRP Project 44 research team identified several potential case studies of freight mode shift: 1. Heartland Corridor, Ohio. This 5-year effort culminated in the clearing of 29 tunnels and other overhead obstacles to allow double-stack rail cars to travel through Ohio and westward. The sponsors projected that the effort would reduce travel for double-stack trains between Columbus, Ohio, and Norfolk, Virginia, by 300 miles. 2. Duluth Intermodal Project, Minnesota. This project upgrades the port, rail, and bridge infrastructure that serves as a major transfer point for intermodal shipments from ports to facilities in Minnesota and throughout the country. 3. Port of Lewiston, Idaho. This port, the furthest inland port on the West Coast, serves exports from Idaho, Montana, Washington, and Wyoming. Eighty-five percent of the regions’ wheat,

108 Impacts of Policy-Induced Freight Modal Shifts peas, and lentils are bound for overseas. The project will revamp the over 30-year-old container dock, and reroute Idaho State Highway 128 to improve truck and intermodal connectivity. 4. The FAST Corridor, Washington State. This corridor project involves freight mobility and traffic enhancements sponsored by the state DOT, Port Authorities, and the Puget Sound Regional Council. It involves raising roadways above at-grade crossings. The proj- ect will reduce delays caused by rail crossings, which amounted to an estimated 270 hours per day in 2010. 5. Memphis Regional Intermodal Facility, Norfolk Southern (NS) Railroad Crescent Cor- ridor, New Jersey to Louisiana. This multimodal facility is a component of a large, multi- state and multi-agency project along the NS Railroad’s Crescent Corridor, which spans 2,500 miles from New Jersey to Memphis and on to New Orleans. Partners are working to create several regional intermodal freight distribution centers. NCHRP Project 08-36/Task 55, “The Role of Collaboration in Freight Transportation Management” The contractor’s final report for NCHRP Project 08-36/Task 55 presented the results of the research on three successful freight transportation projects (Pecor and Campbell 2006). The objective of the research was to provide insight on how to complete complex, intermodal proj- ects through partnerships among public agencies and industry. The report identifies the following characteristics of successful intermodal freight collabora- tions (Pecor and Campbell 2006): • The project is planned by involving institutions that have fostered relationships developed over 5 to 10 years. • The project creates localized effects but distributed benefits. • The project has capital needs that exceed the financial resources of any one organization. • The project occurs in areas of concentrated freight volumes. • The project occurs in locations of major freight gateways and corridors in metropolitan areas. The report traces these drivers of intermodal freight projects by exploring successful ones. Three key examples are highlighted: • Shellpot Bridge, Wilmington Delaware. In 1994, Contrail closed the Shellpot Bridge, a vital freight rail link between the Christina River and the port, as well as between the Maryland and Delaware portions of the Delmarva region. Rail traffic on the bridge was less than 20,000 carloads annually. Both NS and CSX Corporation continued rail service to the port via an indirect route. Eventually NS took ownership of the bridge, but did not rehabilitate it due to financial constraints. In 2002, a partnership was formed—composed of the Delaware DOT, NS, the port, shippers and carriers, and city and county agencies—to plan and facilitate total rehabilitation of the Shellpot Bridge, the connecting rail lines, and rail yard. The bridge spanned 725 feet, and the rail line was equipped with barcode readers and other equipment to allow counting of cars. Shellpot Bridge became the first railroad toll bridge in the country. In 2005, 1 year after project completion, over 100,000 carloads moved across the bridge. The goods movement exceeded NS’s forecasts by 300 percent. Observers attributed the increased traffic to increased movement of construction materials from southern Delaware, increased business from shippers and new customers at the port, and rerouting of existing rail traffic to the more direct line. • The Kansas City Flyovers. Between 1995 and 2005, three projects were completed by public- private partnerships in Kansas City: the Sheffield Flyover, the Argentine Connection, and the High Line Bridge. Collectively known as the Kansas City Flyovers, these projects were the product of a collaboration designed to address truck and passenger car traffic congestion and

Freight Mode Shift Case Studies 109 improve rail service in the region. The Kansas City Terminal Railway and the member railroads and agencies in Kansas and Missouri formed an organization called the Kansas City Inter- modal Transportation Corporation (KCITC). In 2000, KCITC successfully completed the Sheffield Flyover, which created an elevated bridge over its existing track on the east side of the city. Rail congestion had reduced train speeds through the area to 15 and 20 miles per hour. In addition to train delays, the at-grade rail crossing posed safety issues and created congestion for residents and businesses in the area. In 2000, the project was completed, and train speeds increased from 15 to 50 miles per hour. The flyovers collectively reduced delays for over 250 trains per day. The project also improved overall congestion for businesses and residents and reduced air pollution. Because of the Sheffield Flyover’s success, the KCITC undertook two additional flyover projects, the Argentine Connection and High Line Bridge, which pro- duced similar benefits for the freight industry and the public. Following completion of the two projects, train volume increased from 80 to 120 per day. • The FAST Corridor. The Puget Sound Regional Council organized a Regional Freight Mobil- ity Roundtable that incorporated public and private organizations, including community groups and freight industry representatives, in long-range freight planning for the north- south transportation corridors of the region. This group identified impediments to freight movements and developed a capital project improvements program called the Freight Action Strategy for Seattle/Tacoma/Everett, or the FAST Corridor. The first phase of the FAST proj- ect included 15 rail-highway grade crossings and projects to improve port access. The FAST project completed nine of the projects by 2005. This ongoing partnership had completed nearly 20 projects by the end of 2013. Bi-State Domestic Freight Ferries Study This 2006 study, prepared for the Port Authority of New York and New Jersey, examined the feasibility of freight ferries as alternatives to truck movements across the Hudson River using existing bridges or tunnels (De Cerreño et al. 2006). The study found that, although shifting freight to direct rail or barging could reduce truck movements, trucking would remain the main component of the regional goods movement system and traffic. The research focused specifi- cally on the impact of intra-harbor ferries and the domestic freight that trucks would typically transport. The study’s three major findings are the following: • Regulations or policies restricting truck movements for safety, security, or environmental concerns would be essential to foster future markets for freight ferry services in the region. • The best starting point would be to develop a niche market. • The benefits of such policies and a resulting thriving ferry service could include increased service efficiency and new emergency service routes. Freight Transport Management: Increasing Commercial Vehicle Transport Efficiency In August 2013, the Victoria Transport Policy Institute published a chapter in its online Trans- portation Demand Management Encyclopedia entitled “Freight Transport Management: Increas- ing Commercial Vehicle Transport Efficiency” (Victoria Transport Policy Institute 2014). The chapter discusses various strategies that can improve the efficiency of freight operations by pro- viding various freight mode options, creating incentives to use the most efficient mode, increasing load factors, and reducing shipping distances. Potential case studies identified include: • “City logistic” projects in Germany. A partnership among cities, chambers of commerce, manufacturers, and shippers set up trans-shipment facilities outside more than 80 different cities to coordinate delivery services and reduce trips. Shipments coming from several sources, but bound for the same destination in the city, arrive at these warehouses for consolidation.

110 Impacts of Policy-Induced Freight Modal Shifts • Pooled shipping projects at the Port of Vancouver. The facility will pool rail carloads of grain arriving at the Port of Vancouver irrespective of the originating railway and grain company terminal to reduce congestion. • Nunavut express container service (Nexus North, Inc.). This demonstration project involves a new intermodal container express service connecting Winnipeg and Thompson with the Port of Churchill. The service consists of collecting container cargo in Winnipeg and then pulling a flatcar behind a passenger service train. The project enables intermodal efficiencies by utilizing self-loading container chassis technology, which transfers marine containers to and from different modes (e.g., truck flatcars, rail flatcars, and barges). Analysis of TIGER Grant Application Program Evaluation Database Another project selection tool used by the NCFRP Project 44 research team was the TIGER grant application program evaluation database. Jack Faucett Associates, Inc., developed this database for the FHWA as part of an ongoing evaluation of the TIGER grant program. The TIGER database contains detailed information on some 200 successful TIGER grant applica- tions. About two-thirds of these applications were for freight projects. The U.S. DOT’s selection criteria for the TIGER grant program required an equitable regional project distribution with inclusion of rural projects covering all freight modes. The research team examined each of the projects in the TIGER database to screen for proj- ects that encourage mode shift and those that already influence mode choice. In examining the detailed descriptions of the projects, the first step was to eliminate any non-freight projects. The second step was to eliminate any freight projects that only involved truck movements. This process resulted in 59 projects for further review. The third step was to eliminate any projects that did not have a mode shift purpose, such as a project that eliminated an at-grade rail crossing with the purpose of improving truck movements rather than shifting freight to rail. This third step reduced the number of relevant projects to 45. Tables 46 to 49 list each of the remaining 45 projects, and identifies them by name, state, region, rural versus urban location, and mode (port, rail, truck, and bridge). The team also developed a shortened summary description of each project, focusing on the aspects related to mode shift. The table lists the projects separately by TIGER year. Since the TIGER program originated in 2009, many of these projects are not yet in service. However, grantees have completed many of the earlier projects and are putting more into service every day. In addition, many of the TIGER projects are part of larger long-term projects. For example, Project 141 advances Maine’s Three- Port Strategy, a long-term strategy developed in 1978 to concentrate state investments in deep- water port facilities. Examples of major long-term mode shift projects that have received TIGER grants include the following: • Alameda Corridor (Projects 101 and 251) • Marine Highway (Projects 109, 250 and 412) • CREATE program (Projects 110 and 407) • Crescent Corridor (Projects 111 and 331) • National Gateway Corridor (Project 129) • Heartland Corridor (Project 330) Many of the other projects fall within three major types, with some overlap between types. The first group encompasses short-line railroads, individual rail lines, and rail bridges. These include Projects 103, 114, 135, 204, 213, 216, 228, 230, 257, 274, 321, 324, 327, 328, 336, 415, 430, and 440. The second group includes various port-related projects and includes Projects 141, 245, 252, 253, 329, 337, 431, 433, 434, 435, and 446. The third group includes various intermodal facilities, and includes projects 145, 310, 325, 411, and 441.

Freight Mode Shift Case Studies 111 ID Project Name State(s) Region Rural/ Urban Project Description P or t R ai l T ru ck B ri dg e 101 Alameda Corridor East - Colton Crossing CA West Rural Eliminates mainline at-grade rail crossing of UP and BNSF Railways in San Bernardino County Y 103 Appalachian Regional Short Line Rail Project KY/WV/ TN Central Rural Rehabilitation of 100s of miles of track on 5 unconnected short-line railroads in 3 states Y Y 109 California Green Trade Corridor - Marine Highway CA West Urban Develop a marine highway system as an alternative to existing truck and rail infrastructure Y 110 CREATE Program Projects IL Central Urban A package of 78 projects that address freight rail congestion in Chicago Y Y 111 Crescent Corridor Intermodal Freight Rail Project TN/AL South Urban Two new intermodal facilities in Memphis and Birmingham, part of NS Gulf to Mid-Atlantic route Y 114 Fast Track New Bedford MA East Urban Reconstruction of four inadequate freight rail bridges that only allow 5 mph trains Y 129 National Gateway Freight Rail Corridor OH/PA/ WV/MD East Rural Infrastructure and intermodal projects on 3 CSX corridors will allow double-stacked containers Y 135 Port of Gulfport Rail Improvements MS South Urban Upgrades to the KCS Line will accommodate double-stacked containers Y 141 Revitalizing Maine’s Ports ME East Rural Advances Maine's 3-Port Strategy with upgrades at Ports of Portland, Searsport, and Eastport Y 145 S.W. Illinois Intermodal Freight Transportation Hub IL Central Rural Construction of public harbor allows shippers to move goods down Mississippi without locks Y TIGER ROUND I (2009) Source: (Jack Faucett Associates et al. 2013) Note: “Y” means “yes, mode covered.” Table 46. Summary of TIGER grant database freight projects (Round I). ID Project Name State(s) Region Rural/ Urban Project Description P or t R ai l Tr uc k Br id ge 204 Aroostook Rail Preservation ME East Rural Rehabilitate 230 miles of Northern Maine rail improving regional and national goods movement Y 213 Central Pennsylvania Rail and Road Expansion PA East Rural Freight movement efficiency improvements for short-line railway system Y 216 Coos Bay Rail Line (Coos, Douglas, Lane Counties) OR West Rural Rehabilitate and reopen 133-mile Coos Bay Rail Link reducing truck shipments Y 228 Freight Rail Reactivation & Rehabilitation NE Central Rural Rehabilitate and reopen 7.5-mile rail line removing 15,000 annual truckloads from local highways Y Y 230 Great Plains Freight Rail KS/OK Central Rural Rail line improvements and hub relocation making service more competitive with other modes Y 245 Northwest Tennessee Port (Lake County) TN South Rural Construct a port and harbor facility on Mississippi River to create a barge-truck connection Y TIGER ROUND II (2010) Table 47. Summary of TIGER grant database freight projects (Round II). (continued on next page)

ID Project Name State(s) Region Rural/ Urban Project Description P or t R ai l Tr uc k Br id ge TIGER ROUND II (2010) 250 Port Manatee Marine Highway FL South Rural Construct 32-acre container terminal to accommodate short sea shipping rather than trucking Y 251 Port of Los Angeles - West Basin Railyard CA West Urban Construct intermodal railyard and remove 2 at-grade crossings for rail serving Alameda Corridor Y Y 252 Port of Miami Rail Access FL South Urban Intermodal yard and rail/bridge improvements to allow container rail service to the Port of Miami Y Y Y 253 Port of Providence - Electric Cranes RI East Urban New cranes to enable the Port of Providence to handle container traffic and reduce truck traffic Y 257 Reconstruct MRC Railroad SD Central Rural Rebuild state-owned branch line shifting agricultural commodities to rail from truck Y 274 West Vancouver Freight Access WA West Urban New Port of Vancouver rail access route to alleviate rail congestion, expanding rail from 72 to 85% Y Source: (Jack Faucett Associates et al. 2013) Note: “Y” means “yes, mode covered.” Table 47. (Continued). ID Project Name State(s) Region Rural/ Urban Project Description P or t R ai l Tr uc k Br id ge 310 Dames Point Intermodal Container Facility FL South Rural New Intermodal Container Transfer Facility served by CSX with 5-track yard and 2 electric cranes Y 321 Merrimack River Bridge Rehabilitation MA East Urban Repair and reconstruct 3 bridges with 12 spans carrying 2 rail tracks from Boston to the north Y Y 324 Muldraugh Bridges Replacement KY Central Rural Replace 2 deteriorating freight rail bridges on heavily utilized freight rail line in KY Y Y 325 Northern Montana Multimodal Hub MT West Rural Construct port of multimodal hub for BNSF to ship/receive containerized international cargo Y 327 Oklahoma Freight Rail Upgrade OK South Rural Upgrade 49 miles of state-owned rail to increase speed/capacity for transport of crude oil/gas Y 328 Port of Long Beach Rail Realignment CA West Urban Improve tracks/chokepoints to 2 rail yards enabling port to move 35% of goods by on-dock rail Y 329 Port of New Orleans Rail Yard Improvements LA South Urban Renovate rail yard to reduce congestion, facilitate marine/rail cargo/international commerce Y 330 Prichard Intermodal Facility WV South Rural Construct new intermodal terminal along NS Heartland Corridor near Prichard, WV Y 331 Rutherford Intermodal Facility Expansion PA East Urban Expand Crescent Corridor Intermodal Facility by 125,000 lifts 336 Solomon Rural Rail Upgrade KS Central Rural Refurbish 84 miles of restricted track to avoid abandonment and spike in agricultural truck use Y 337 South Jersey Port Rail Improvements NJ East Urban Repair DelAir Bridge linking PA/NJ rail and enhance NJ Ports for increased demand Y Y TIGER ROUND III (2011) Source: (Jack Faucett Associates et al. 2013) Note: “Y” means “yes, mode covered.” Table 48. Summary of TIGER grant database freight projects (Round III).

Freight Mode Shift Case Studies 113 Analysis of AASHTO’s The Case for Freight Reports (AASHTO 2010a) In 2010, AASHTO published a series of over 30 reports entitled The Case for Freight (AASHTO 2010a). Organized by state, these reports identify projects that could increase the capacity of the nation’s transportation system. Specifically, AASHTO believes these projects will yield a range of benefits including increasing efficient movement of goods, stimulating economic develop- ment, creating improved access to energy, and connecting communities. Figure 33 provides an example of one of The Case for Freight documents. AASHTO originally hosted the reports on a website, www.expandingcapcity.transportation.org, which AASHTO subsequently deactivated. The research team worked with the AASHTO’s publica- tion staff to obtain the documents from AASHTO’s archives, examined each of the 30 reports, and compiled a list of all of the featured projects. Many of the projects highlighted are geared toward ID Project Name State(s) Region Rural/Urban Project Description P or t R ai l Tr uc k Br id ge 407 CREATE (Chicago) IL Central Urban Improve Western Ave. corridor switches, CSX/NS/BNSF connection tracks, traffic control system Y 411 Garrows Bend Intermodal Container Facility (Mobile) AL South Urban Connect container facility with national rail system featuring 20 acres of new water’s edge rail Y Y 412 Gulf Marine Highway Intermodal Project (Brownsville) TX South Rural New 600-ft cargo dock/railroad sidings to expand marine highway container operations Y Y 415 Hunts Point Freight Rail Improvement Project (Bronx) NY East Urban Freight rail improvements at the Hunts Point Terminal Produce Market to reduce truck traffic Y 430 Northern Vermont Freight Rail Project (St. Albans) VT East Rural Upgrade 18.8 miles of rail to Canada to allow efficient regional/international goods movement Y 431 Nueces River Rail Yard Expansion (Corpus Christi) TX South Urban New port rail infrastructure allowing rail to replace truck shipments and increasing exports Y Y 433 Port of Catoosa Main Dock Rehabilitation (Tulsa) OK South Rural Renovate main dock, realign rail, and renovate crane at Tulsa Port of Catoosa, a large inland port Y 434 Port of Lewiston Dock Extension ID West Rural Improve inland port on Columbia/Snake River System by extending existing dock Y 435 Port of Oakland Intermodal Rail Improvements CA West Urban Increase rail access with new arrival track, high-speed UP mainline turnout and new manifest yard Y Y 440 Siskiyou Summit Railroad Revitalization (SW Oregon) OR West Rural Support 296-mile short-line rehab to reopen track parallel to I-5 and provide competitive mode Y 441 South Hudson Intermodal Facility (Bayonne) NJ East Urban Build intermodal facility handling 250,000 containers/year for larger Post Panamax vessels Y Y 446 West Memphis International Rail Port AR South Rural Extend spur and upgrade rail allowing direct access between rail and waterborne cargo Y Y TIGER ROUND IV (2012) Source: (Jack Faucett Associates et al. 2013) Note: “Y” means “yes, mode covered.” Table 49. Summary of TIGER grant database freight projects (Round IV).

114 Impacts of Policy-Induced Freight Modal Shifts Source: (AASHTO 2010a) Figure 33. Example of one of The Case for Freight documents. reducing truck traffic congestion and improving safety. Since the scope of this project focuses spe- cifically on mode shift, the research team refined the list to include only those projects that created or facilitated mode shifts. Table 50 provides a summary of these projects. Case Study Selection Methodology After thoroughly researching the Internet, reviewing the literature, and interviewing subject- matter experts, the research team compiled a list of potential freight mode shift case studies and developed a methodology for choosing the projects that best fit the scope of this research effort. The following section presents a discussion of the selection methodology, a compilation of candidate case study projects, and a list of suggested projects for further exploration and full case study development. To pare down the extensive list of potential case study projects and to ensure that a representative sample of mode shift policies, modes, and success factors was included, the research team developed the following selection criteria: policy type, location and region, timeliness and data availability, degree of success, and original policy intent. Each criterion is briefly described in the following: • Policy type. For each potential mode shift example, the research team identified the type of policy or investment involved. The study team classified projects into 11 major types: – Projects involving investments in major cross-country rail corridors. – Projects involving investments in urban intracity corridors.

Freight Mode Shift Case Studies 115 – Investments in short-line railroads or individual rail segments. – Those encompassing rail shifts involving more localized rail projects, such as upgrades to rail bridges or rail crossings. – Projects involving investments to rail lines serving ports. – Projects involving investments in waterways or marine highway projects. – Investments in port facilities generally centered at an individual port. – Various intermodal facilities designed to allow freight to move from one mode to another. – Projects that involved policies incorporating time-of-day or land-use fees or restrictions. – Those including regulatory policies undertaken at the local, state, or federal levels (includ- ing internationally based policies or projects such as the Panama Canal expansion). – Those involving U.S. trade policy, such as NAFTA. The identification of projects by type is often subjective. Some projects or policies have ele- ments of multiple types of investments or modes. For this research, the overall purpose of identifying projects by type was less classification and more to ensure that a variety of policies, investments, projects, and types of modes and industries was represented. • Location and region. The geographic location of each project was considered to ensure that the research reflected efforts throughout the country, in both urban and rural settings. The team classified project regions as North and East, South, Central, and West. Within each Project Location Mode Description Rail Improvements Phoenix-to-Tucson corridor Arizona Rail Expand the capacity of the Sunset Corridor of the Union Pacific Railroad, which parallels the interstate between Phoenix and Tucson. It includes new rail yards and intermodal facilities. Chesapeake Connector Delaware Rail Chesapeake Connector is a freight rail project designed to solve a bottleneck in rail freight access along Amtrak rail lines from Perryville, Maryland, to Newark, Delaware, and then down the Delmarva Peninsula. A 6-mile piece of track separates freight movements from passenger service. Eller Drive Overpass at Port Everglades Florida Rail Grade separation at the main entrance to Port Everglades in Fort Lauderdale, extending rail lines onto the port and constructing an intermodal transfer facility. CSX National Gateway Intermodal Facility Maryland Rail Establishment of a new intermodal facility to provide double stack service from Baltimore to the west. Detroit Intermodal Freight Terminal Michigan Rail Construction of an intermodal freight terminal to serve the four railroads (CN, CP, CSX, NS) that utilize Detroit as an access point for international trade. Duluth Intermodal Project Minnesota Water, Rail Upgrades the port, rail, road, and bridge infrastructure that links the port to the national transportation system. Ohio Heartland Corridor Ohio Rail Double-stacked rail route from mid-Atlantic ports to Columbus, Chicago, and points west. It reduces travel between Columbus and Norfolk, Virginia, by 300 miles. Crescent Corridor Pennsylvania Rail Intermodal freight program includes rail capacity and speed improvement projects across five states along a 2,500-mile network. It includes a proposed intermodal facility in Franklin County. Memphis Regional Intermodal Facility Tennessee Rail Part of the Crescent Corridor program, includes the proposed construction of a new intermodal facility. Freight Shuttle System Texas Rail System will move trailers and containers using electric vehicles that run on a specialized derailment-proof guideway. Rail Enhancements Virginia Rail Part of the NS Heartland Corridor initiative, Virginia raised the height of five tunnels and constructed an intermodal facility. Source: (AASHTO 2010a) Table 50. Summary of The Case for Freight project examples.

116 Impacts of Policy-Induced Freight Modal Shifts region, the team classified projects as urban or rural. The classification of projects by region can be subjective, given that some projects cross boundaries between rural and urban locations or include both. • Timeliness and data availability. A key criterion for project selection is the availability of data. To ensure the likelihood of data being available to document the impact of each project, the research team examined whether the projects were timely or not. The research team defined “timely” as completed and operational, with adequate time having passed to enable examina- tion of effect. The goal was to study recent projects, but not projects that were so new that they lacked the data and information needed to fully evaluate their success and to document all of the contributing factors. The research team also conducted a cursory evaluation of each can- didate to assess whether the data needed to complete a meaningful analysis would be available. • Degree of success. The NCFRP Project 44 panel members expressed interest in including a case study of an unsuccessful modal shift project. One panel member suggested including the Port Authority of New York and New Jersey (PANYNJ) barge service to Albany, New York, identified as a marine highway project. In general, the research team was not able to identify the degree of success for each of the policies or projects prior to conducting selection of case studies. However, the case studies examine the degree of success of the individual project or policies. • Original policy intent. The NCFRP Project 44 panel members expressed interest in arranging or correlating case studies that represented either intended or unintended modal shifts. For example, one panel member stated, “we are not only interested in looking at the impacts on freight modal shift of policies designed or initially proposed to induce such a mode shift (e.g., grade separation or corridor improvement projects) but also other policies that may have led to such mode shifts anyway.” In the real world, projects and policies often have many purposes. For example, a project may aim to improve air quality or automobile congestion but may have the side effect of causing modal shift. In general, the research team was not able to identify the original intent of each of the policies or projects prior to actually conducting the case studies. However, the case studies examine the possible original intents of the individual project or policies. The case studies also compare and contrast these intents with the ultimate results. Compilation of Potential Case Study Candidates Table 51 summarizes the case study candidates culled from the various methodologies. To develop this matrix, the research team first compiled a list of all the potential case studies, elimi- nating any duplicates identified by multiple sources. Research team members then assigned each case study to a policy type, a geographic region of the country, and a rural or urban location. In Table 51, policy type is arrayed on the vertical axis, and region (both area of the country and urban/rural) is arrayed on the horizontal axis. The table also displays in boldface type the projects expected to fit the timeliness and data availability criterion. Projects identified by the NCFRP Project 44 panel are italicized. List of Case Study Projects for Additional Research and Development After compiling the table of case study candidates and conducting an analysis using the selec- tion criteria, the research team developed a list of projects for additional research and full case study development. These projects, shown in Table 52, represent a range of policy types, geo- graphic regions, and urban and rural locations. The research team also considered the likelihood of available data on the projects’ mode shift impacts, including information regarding specific policies involved in their planning. The team also included an example of an unsuccessful proj- ect. Note that the list includes 10 case studies, more than the required number of projects. The extra four projects were included as backup, in the event that further research revealed insuf- ficient data were available to meet the needs of the research.

Freight Mode Shift Case Studies 117 Policy North and East South Central West Urban Rural Urban Rural Invest in Cross-Country Corridor National Gateway Freight Rail Corridor Invest in Intracity Corridor Invest in Short-Line Rail The Harlem Corridor Aroostook Rail Preservation Coos Bay Rail Line (Coos, Douglas, Lane Counties) Central PA Rail and Road Expansion Palouse-Coulee City Short-Line Rail Northern Vermont Freight Rail Project Siskiyou Summit Railroad Revitalization Invest in Rail Bridges and Crossings Hunts Point Freight Rail Improvement Project (Bronx) Chesapeake Connector Merrimack River Bridge Rehabilitation Fast Track New Bedford Shellpot Bridge (DE) Eller Drive Overpass at Port Everglades Kansas City Flyovers Rural Crescent Corridor Intermodal Freight Rail Project Port of Savannah Cordele Intermodal Short-line RR Oklahoma Freight Rail Upgrade Texas Freight Shuttle System Urban Phoenix to Tucson “Sunset” Corridor Rail Improvements CREATE Program Projects (Chicago) Rural Heartland Corridor Appalachian Regional Short-Line Rail Project Solomon Rural Rail Upgrade Nebraska Freight Rail Reactivation & Rehabilitation Great Plains Freight Rail Muldraugh Bridges Replacement Reconstruct MRC Railroad Urban FAST Corridor West Vancouver Freight Access Port of Long Beach Rail Realignment Colton Crossing Invest in Rail to Port South Jersey Port Rail Improvements Port of Gulfport Rail Improvements Port of Miami Rail Access Invest in Port Facilities Port of Providence Electric Cranes Revitalizing Maine's Ports Port of Houston Coach Lines Northwest Tennessee Port (Lake County) Canada to U.S. Grain Shipments in NY Port of New Orleans Rail Yard Improvements Port of Catoosa Main Dock Rehabilitation Invest in Inter- modal Facility Rutherford Intermodal Facility Expansion Garrows Bend Intermodal Container Facility Dames Point Intermodal Container Facility Duluth Intermodal Project S.W. Illinois Intermodal Freight Hub Port of Los Angeles - West Basin Railyard South Hudson Intermodal Facility (Bayonne) Nueces River Rail Yard Expansion (Corpus Christi) West Memphis International Rail Port Gulf Marine Highway Intermodal Project Detroit Intermodal Freight Terminal Port of Lewiston (Idaho) Improvements Northern Montana Multimodal Hub Table 51. Summary of case study candidates. (continued on next page)

118 Impacts of Policy-Induced Freight Modal Shifts Selected Case Studies The six case studies selected are described below, along with the lessons learned from each study. Following each is a two-part “Epilogue” describing additional information about each case study from 2014 to present and detailing additional lessons learned since 2014. The emer- gence of the New York planning agency report, “NYC Truck Route Management and Com- munity Impact Reduction Study” (New York City DOT 2003) provided an opportunity for this research to cover many of the New York State issues included in the case selection matrices in Table 51. Thus, this was the final case study selected and is provided below. Palouse River and Coulee City Short-Line Freight System The Palouse River and Coulee City Railroad (PCC) is a 300-mile, short-line freight system located in eastern Washington State (see Figure 34). The PCC, the state’s second largest rail Policy North and East South Central West Urban Rural Urban Rural Rural Urban Rural Urban Time-of-Day or Land-Use Fees or Restrictions NY City Bridge Peak Hour Truck Pricing Peak Hour Fees at LA Ports Land Use Policies that Restrict Location of Warehouses in Certain Areas Regulatory Policy Hours-of-Service Regulations National Truck Size and Weight Regulations Local Vehicle Size and Weight Restrictions Mileage-Based Highway User Fees International Policies/ Projects Panama Canal Expansion Access Restriction Policies for Trucks in Urban Areas (Europe) U.S. Trade Policy NAFTA Table 51. (Continued). Project Name Policy Type Region Urban/ Rural Timeliness Successful Crescent Corridor Intermodal Freight Rail Project Invest in Cross Country Corridor South Rural Yes TBD Heartland Corridor Invest in Cross Country Corridor Central Rural Yes TBD CREATE Program Projects (Chicago) Invest in Intracity Corridor Central Urban Yes TBD Palouse-Coulee City Short- Line Rail Invest in Short-Line Rail West Rural Yes TBD The Harlem Corridor Invest in Short-Line Rail North & East Urban Yes TBD PANYNJ Barge Service to Albany Invest in Waterways and Marine Highways North & East Urban Yes No CA Green Trade Corridor Marine Highway Invest in Waterways and Marine Highways West Urban Yes TBD Canada to U.S. Grain Shipments in NY Invest in Port Facilities North & East Rural Yes TBD Detroit Intermodal Invest in Intermodal Facility Central Urban Yes TBD Local Vehicle Size and Weight Restrictions Regulatory Policy N.A. N.A. Yes TBD Note: TBD = to be determined. Table 52. Summary of case study candidates.

Freight Mode Shift Case Studies 119 system, connects three separate railroads located in Spokane, Lincoln, Grant, and Whitman counties. These tracks include the following: 1. The PV Hooper branch, which runs from Thornton to Winona and from Hooper to Winona to Colfax. 2. The P&L branch, which runs from Marshall through Pullman to the northern Idaho border and from Palouse directly to Washington’s eastern Idaho border. 3. The CW branch, which runs from Coulee City to Cheney. While the system primarily transports grain from farmers in eastern Washington, it also carries fertilizer, raw materials used in biodiesel manufacturing, lumber, and liquid propane (WSDOT 2008). Citing lack of profitability and increased maintenance costs, the PCC’s owner, Watco Companies, Inc. (Watco), deferred maintenance of the system for years and considered ceasing oper- ations completely. In 2007, under Chapter 518, Section 713, the Washington State Legislature completed the purchase of all three rail lines from Watco to save the PCC tracks from abandon- ment. The Washington State DOT (WSDOT) was tasked with overseeing rehabilitation of the lines and related infrastructure. The total expenditure, including purchase of all three lines, operating rights, rehabilitation projects, and funding allocated to establish an intergovern- mental agency to manage the PCC, totaled $27.7 million (WSDOT 2014). Source: (WSDOT 2014) Figure 34. The PCC.

120 Impacts of Policy-Induced Freight Modal Shifts In 2008, Grant County, Lincoln County, Spokane County, and the Port of Whitman County signed an agreement to form the PCC Rail Authority. Today, WSDOT is responsible for oversee- ing the facilities and regulatory portions of the operating leases. These duties include identifying areas along each branch where rehabilitation is required, and working with local government agencies and businesses to determine and prioritize needs. WSDOT also selects operators for the CW and P&L branches of the PCC and monitors their compliance with negotiated leases. The PCC Rail Authority manages the business and economic development portions of the rail system’s operating leases (WSDOT 2008). Rehabilitation projects completed in 2010 and 2011 included drainage improvements to protect the track from standing and running water; repair of bridges, tracks, ties, and ballast; and new fencing. Prior to state ownership, portions of the PCC system were operated at a speed lower than regulations would allow had the tracks been prop- erly maintained. These rehabilitation projects prevented further deterioration, raised operating speeds, and made the rail operations more efficient and cost competitive with other services (WSDOT 2014). Project Policies, Programs, and Motivations The state legislature’s decision to purchase and rehabilitate the PCC was motivated by three major factors: 1. Concerns expressed by grain shippers and other PCC system users regarding the potential increase in shipping rates by other carriers resulting from reduced competition. 2. The importance of preserving the PCC infrastructure to support emerging biofuel produc- tion industries. 3. Reducing the potential for diversion of freight traffic from rail to surface streets. On learning that the PCC would cease operations, the grain shippers and other system users recommended that the state purchase the lines to preserve rail access to growers in eastern Washington and to ensure that the PCC remained a shipping option. Without the PCC as a transportation alternative, shippers were concerned that rates for existing truck-to-barge services and the Ritzville Grain Shuttle would increase (WSDOT 2009). WSDOT recommended that the state purchase the PCC to preserve the region’s rail and road infrastructure. WSDOT recognized that if the PCC was abandoned, the cost to acquire and rehabilitate the system in the future would be higher. WSDOT also indicated that the PCC could play an important part in future development of the biodiesel industry in the state. A market study commissioned by WSDOT in 2006 found that private investors were exploring the possibility of locating a crushing plant on the CW line and other lines in eastern Washington. Crushing is the process whereby canola and other crops are transformed into oil and later blended with diesel fuel to create a biodiesel fuel mix (Casavant and Jessup 2006). WSDOT also projected that closure of the PCC system would result in diversion of rail traffic to surface streets. This would result in increased wear and tear on the roads, maintenance costs, and con- gestion. Freight transportation to and from the region would also be less reliable, since trucks are subject to seasonal road closures and roadway load restrictions (WSDOT 2009). Lessons Learned The motivations for this project or policy encompass a variety of goals for which mode shift represents an overall proxy. These goals include increased rate competition, preservation of infrastructure, reductions in road wear, and positive contributions to economic development. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations?

Freight Mode Shift Case Studies 121 The initial motivation for this project was not to cause mode shift, but rather to prevent it. WSDOT’s purchase of the PCC, spurred by the potential abandonment of the rail system by its owners, prevented a modal shift from rail to a combination of mostly truck and barge. As one farmer noted, “If we didn’t have the rail, we would have to rely on trucking to the river . . . and that increases use of Highway 26, plus we are at the mercy of river closures (WSDOT 2013).” Public policy, in the form of WSDOT’s involvement in the project, was the primary driver in preventing the modal shift. In addition, the additional resources available from the public sec- tor allowed investment in rehabilitation and maintenance of the PCC. As a result, the PCC has been able to increase traffic every year, removing over twice as many trucks from roadways in comparison to 2007, the first year that the state assumed full ownership of the system (Herman 2014). Figure 35 presents railcar shipments versus trucks removed from roadways for the PCC for the years 2007 to 2012. Planners, policymakers and members of the shipper and carrier industry can use the PCC project as a guide for leveraging state and local resources to support the preservation or rehabili- tation of freight infrastructure. The Washington State Legislature, guided by recommendations from WSDOT and concerns raised by a coalition of farmers and grain cooperatives, adopted legislation to purchase, rehabilitate, and improve the deteriorating PCC. This policy and the resulting projects are a success because they addressed the needs of shippers and carriers as well as the state’s goals. The PCC project has helped to reduce the impact of truck traffic on state and county roads and has created a reliable and competitively priced shipping option. The project also supports the state’s economic development and environmental goals. Policymakers, however, should also be cognizant that “the success of short-line railroads throughout the nation has varied (Casavant and Jessup 2003).” In some cases, this has been due to a lack of managerial expertise and marketing knowledge. In other cases, especially short-line railroads dependent on bulk agricultural movements, public entities have discovered that rev- enues were too low to sustain operations (Casavant and Jessup 2003). In the case of the PCC, public benefit has resulted from a combination of reduced road wear and economic develop- ment. The ability of the PCC to provide benefits greater than costs varies from year to year depending on the economy and the quality of the crops (Herman 2014). In assessing short-line railroad investments, decision makers should be cognizant of the entire supply chain from origin to destination. Access to different modes is a key consideration; if Source: (WSDOT 2013) Figure 35. Railcar shipments versus trucks removed from roadways (2007–2012).

122 Impacts of Policy-Induced Freight Modal Shifts the short line is captive to a single mainline railroad, its financial viability may be at their mercy. In addition, diversity of commodities is a positive factor, as it lowers risk. For the PCC, for example, an expected market for biofuel production has not materialized (Herman 2014). Epilogue—Recent Developments The PCC system has experienced fluctuations in rail traffic since the NCFRP Project 44 research team conducted the original case study. WSDOT staff, in an interview with the research team, provided the most recent data on PCC carloads per year.2 Figure 36 provides the annual carload data that the WSDOT staff transmitted. In the original case study, the data showed increases in carloads every year through 2012. However, in subsequent years carloads declined before recovering in 2017. According to WSDOT personnel, crop yields were the primary factor leading to the lower-volume years. In particular, 2015 was a year with a low harvest. WSDOT and the PCC Rail Authority worked in partnership to develop a 2015 to 2025 stra- tegic plan for the PCC rail system (WSDOT 2015). The purpose was to outline the vision and goals for the system and define the projects required to fulfill those goals. The strategic plan identified and prioritized $58 million in infrastructure projects. The three major purposes of these projects included: 1. Increase the capability of handling 286,000-lb rail cars with advance priority projects; 2. Rehabilitate track located in moderate and sharp curves to allow for increased speeds; and 3. Identify and replace defective rail through integrity testing. The plan also identified a number of operational strategies to enhance efficiencies. These included improving the terms of future operating leases, pursuing minimum railcar orders, ensuring access to major river terminals and major railroads, and considering rail service needs throughout the system in a strategic manner. The plan notes that the PCC has the capacity to handle additional mode shift freight from in-state roadways. However, to remain competitive and meet WSDOT goals of diversion of freight, strategic investments are required along with operational changes and policy improvements. In the Washington State Freight Plan, WSDOT reiterated its commitment to the PCC. The plan states that WSDOT will continue to support the short-line rail system in Washington. In Source: (WSDOT 2015) PCC Carloads 14,000 12,000 11,424 11,887 11,714 10,209 10,000 9,726 9,229 8,083 8,191 8,661 8,000 6,000 4,000 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5,904 8,934 C ar lo ad s Figure 36. Carloads on the PCC system by year (2007–2017). 2 Telephone interview with Bob Westby (Manager, Palouse River and Coulee City Rail System, WSDOT) and Jason Beloso (Strategic Planning Manager: Rail, Freight and Ports Division, WSDOT) on September 17, 2018.

Freight Mode Shift Case Studies 123 addition, WSDOT will continue to manage the programs that support short-line rail freight, such as the Freight Rail Investment Bank program, the Freight Rail Assistance Program, and the Grain Train program. WSDOT will also continue to manage and make improvements to the state-owned PCC rail system. The Washington State Legislature passed new funding for preservation of the PCC in the 2017 to 2019 biennium. The new funding level of $6,696,000 is a significant increase from previous biennia. The Washington State Legislature plans to sustain this funding for the next five biennia as well. WSDOT will use this funding to preserve the infra- structure of the PCC rail system. The state currently leases the rail lines to private operators. While these operators do not pay for the leases, they are responsible for the maintenance of the lines. A major positive development was the investment and other actions taken by the shippers. In particular, WSDOT personnel mentioned that five of the grain co-ops had banded together to consolidate shipments so that they could fill 110-car unit trains and receive the most favorable shipping rates. Their volumes are allowing them to reserve unit train reservations in advance. In at least one occasion, they resold their unit train rights, made a profit, and moved their grain by truck and rail. In addition, the co-ops invested $30 million in new grain elevator facilities. A potential development could make the preservation of the PCC system an even more important decision. In 2016, a federal judge in Oregon ordered the Bonneville Power Adminis- tration and other federal agencies to produce a new salmon-recovery plan that would consider breaching the four dams on the lower Snake River. The plan was due in 2018. Washington’s wheat industry relies on barges to ship wheat down the Snake and Columbia rivers to ports in Portland and Vancouver and beyond. Breaching the dams would end barge navigation up the Snake River and force millions of tons of commercial cargo, valued at more than $3 billion, onto road and rail infrastructure. Epilogue—Lessons Learned The PCC experience is extremely relevant for policymakers, especially those considering how to deal with the abandonment of branch lines or short-line railroads. One important item to note is that these lines have been successful in the past and already represent a significant amount of in-place infrastructure and investment. Reviving a service that was economically viable in the past can mean that subsidies, more favorable business conditions, and/or better management can bring these investments back to life. Government subsidies designed to provide positive public externalities such as reduced road congestion, reduced road wear, decreased emissions, and economic development, can bring that former service back by closing the “economic gap.” The NCFRP Project 44 research team also noted the dip in carloads in 2015 and discussed this issue with WSDOT staff. There was agreement that projects that rely on a single or a few markets or commodities, such as grain, will be subject to fluctuations and uncertainties. In general, the greater the diversity in cargo, the lesser risk the project will face. This is especially relevant to commodities such as grain, which are subject to both growing conditions and trade relations. The recent tariffs have yet to affect the short-term market, but have created anxiety in the market place over longer-term outcomes. While the state has, and will continue to have to invest in the line, private shippers have also invested, and the state and shippers have benefited through lower shipping rates (brought about by unit trains and other factors) and economic development. Thus, a major positive outcome of the preservation of the short-line option is that it provides shippers with options and has allowed shippers to benefit from modal competition. In the case of the PCC, a number of smaller grain cooperative operators merged into a single co-op and built new grain elevator facilities. They then had sufficient quantity to contract a

124 Impacts of Policy-Induced Freight Modal Shifts unit train and to negotiate the most favorable shipping rates. In addition, the commodity can be stored at the grain terminal allowing the owners to play the commodity market and improve their profitability. The lesson learned is that transportation options and the right facilities can make huge differences in transportation costs and economic vitality. Overall, public ownership of a railroad has challenges. Maintenance costs are high and capital upgrades are expensive. However, an agreed-upon strategic plan can galvanize the support of the various stakeholders and be a catalyst for success. With everyone on the same page, decision makers may be more likely to move forward on the action steps presented in the plan. Here, public investment spurred private-sector commitment, maintained transportation options, and provided shippers with alternatives that allowed them to minimize transportation costs, adding to regional economic development. The Crescent Corridor The Crescent Corridor is an over $2.5-billion rail infrastructure improvement project oper- ated by NS. The corridor, under development since 2008, consists of a 2,500-mile network of existing rail lines that extends from New Jersey to Memphis and on to New Orleans (see Figure 37). Corridor projects include straightening curves, adding signals, and building new track and rail terminals. NS also partnered with the states of Tennessee, Pennsylvania, Virginia, Alabama, and Mississippi to improve the system and develop regional intermodal freight distri- bution centers (NS 2009a). Source: (NS 2014b) Figure 37. Map of NS Crescent Corridor.

Freight Mode Shift Case Studies 125 According to NS, the Crescent Corridor’s benefits and anticipated impacts include the fol- lowing (NS 2014a): • Creating nearly 123,000 jobs across the rail network by 2030. • Creating new terminal facilities in Birmingham, Alabama; Memphis, Tennessee; Charlotte, North Carolina; and Greencastle, Pennsylvania. • Saving more than $575 million in traffic congestion annually. • Reducing 1.9 million tons of CO2 annually. • Saving more than 169 million gallons of fuel annually. • Removing more than 1.3 million long-haul truckloads of activity from roadways on an annual basis. Project Policies, Programs, and Motivations In an interview with “BizNS,” Norfolk Southern’s newsletter, Mike McClellan, Vice Presi- dent of Automotive and Intermodal Marketing, stated that the motivation for establishing and expanding the Crescent Corridor came after the company learned that shippers and domestic channel partners were looking for a faster network for domestic intermodal traffic to move between the Northeast and the Southeast along Interstate 81 and Interstate 85 in Virginia to North Carolina (NS 2009b). “Unlike the Heartland Corridor, which primarily supports our international business, the Crescent Corridor is focused on our domestic business. We worked with our intermodal cus- tomers, and especially our domestic intermodal partners, to determine where the best oppor- tunities to convert highway freight to NS would be,” said McClellan. “This particular corridor provides opportunities for us to compete with single-driver, over-the-road truck shipments of more than 550 miles, in partnership with our key domestic service providers” (NS 2009b). NS estimates that the average intermodal train can haul the equivalent of 280 truckloads and can transport a ton of freight 436 miles on just one gallon of fuel. This mode shift potential, combined with the fuel savings and associated reductions in carbon emissions, made the Crescent Corridor project an ideal candidate for public-private partnerships (NS 2009a, NS 2013). To kick-start the project, the Commonwealth of Virginia committed $45 million to the cor- ridor, and work began in 2008. Projects include a branch line between Manassas and Front Royal, Virginia; signals; the addition of three full-size passing tracks; and a 5-mile segment of double track. NS matched the state funds (Virginia Department of Rail and Public Trans- portation 2008, November 2013). In 2010, the Crescent Corridor Intermodal Freight Project received a $105-million American Recovery and Reinvestment Act TIGER grant, which included $52.5 million to construct the Memphis Regional Intermodal Facility (FHWA 2014a). Lessons Learned The motivations for this project or policy encompass a variety of goals for which mode shift represents an overall proxy. These goals include reductions in fuel use and emissions, easing of congestion, improvements in safety, increases in carrier efficiencies and concurrent reductions in shipper costs, and positive contributions to economic development. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations? The ability of the Crescent Corridor to cause mode shift is a direct function of the planned strategy to target lanes and make investments to compete with long-haul trucking. NS purchased data on truck movements for city pairs and examined NS’s ability to provide comparable service

126 Impacts of Policy-Induced Freight Modal Shifts to trucks, in terms of speed and reliability, at below-market prices. For lanes that NS determined could be competitive, NS worked with shippers to see if they would be interested in intermodal service and with federal, state, and local governments to make the necessary investments in terminals and track infrastructure so that they could offer competitive services (Wilson 2014). The research team interviewed Mr. Darrell Wilson, Assistant Vice President of Government Relations at NS, to document the influential factors or policies that supported this modal shift project. According to Mr. Wilson, the key factor in making the Crescent Corridor a reality was the ability to get the different public and private-market actors to understand that the bottom- line benefits to the rail company also provided real economic development and truck diversion opportunities for the public. NS achieved this goal by working with manufacturer and retailer supply chain representatives and shipping companies to identify what goods they move, and how and what could be done to make intermodal transport a viable option. After finding that common thread or common concern, they developed a policy to address it and to incentivize these actors to use intermodal transport (Wilson 2014). Policymakers can seek to expand and transfer the concepts that NS employed in the Crescent Corridor to additional projects and lanes. For example, the NS representatives noted that NS examined a variety of lanes, but only selected the most lucrative. Further investments in ter- minals and the rail network could allow expansion to additional lanes both inside and outside the Crescent Corridor. Wilson noted that for the lanes involved in the Crescent Corridor, the new intermodal services have captured 20 percent of the truck VMT, but that the NS goal is 28 percent. In addition, the model of collaboration and cooperation, coupled with the public and private partnership model, also offers promise for other mode shift projects (Wilson 2014). Epilogue—Recent Developments The Crescent Corridor is a more than $2.5-billion rail infrastructure project. The corri- dor is a 2,500-mile freight rail network that runs through 13 states from the Gulf Coast to the mid-Atlantic. The rail line connects Memphis and New Orleans to New Jersey and runs parallel to Interstate highways I-20, I-40, I-59, I-75, I-76, I-77, I-78, I-81, I-85, and I-95. The project includes the construction and expansion of terminals, the laying of passing routes at the terminals, the straightening of curved routes, and the addition of signals. Construction is underway at various terminal locations, and the project sponsors expect full development by 2020. A fleet of 28 trains will operate on the fully developed Crescent Corridor. Each train hauls 280 truckloads of cargo (Railway Technology n.d.). A number of new Crescent Corridor intermodal facilities have opened in addition to the five that were operational in 2009. As of 2013, nine intermodal facilities were operational, with an expansion of the Rutherford, Pennsylvania, facility completed in the fall of 2015. The new facili- ties ranged in annual lift capacity from 65,000 to 200,000 lifts, expanding capacity by 800,000 lifts per annum (NS Government Relations 2016). The completed corridor connects 11 intermodal facilities (Railway Technology n.d.). Since the Crescent Corridor’s 2012 completion, NS’s intermodal traffic has increased. According to the Vice President of Intermodal and Automotive, Jeff Heller, “We believe all our growth on Crescent has been truck traffic” (Huso 2016). Activity increased to almost 400,000 units in 2015, up from approximately 200,000 in 2010. This was the latest year for which NS provided activity data. Between 2010 and 2015, the compound annual growth rate was 14 percent. Figure 38 provides data on annual intermodal units on the Crescent (and Heartland) Corridors. As part of planning for the Crescent Corridor, NS conducted its own market research by contacting potential customers. Based on customer feedback about the planned services, NS developed estimates of how many intermodal trucks could be diverted to rail with the planned

Freight Mode Shift Case Studies 127 Crescent Corridor improvements. NS developed separate traffic forecasts for 63 different origin- destination movements between rail hubs from Texas to New Jersey. NS estimated that around 1.3 million intermodal units would be diverted from truck to rail in the year 2012 (Cambridge Systematics, Inc., 2010). The analysis reflected the low share of intermodal shipments for the origin/destination pairs that the designers of the Crescent Corridor sought to serve. Figure 39 provides intermodal and truck market shares for a variety of origin/destination pairs for different NS corridors. As Fig- ure 39 shows, the corridors that the Crescent was to serve had much lower intermodal shares than pairs served by the other NS corridors. Cambridge Systematics conducted a benefit-cost analysis of the Crescent Corridor. It found that the following long-term public benefits (based on 1.3 million units per year) would accrue annually at full operation (NS Government Relations 2016): • $543 million in shipping savings; • $566 million in congestion savings (22.5 million hours of transit time savings); • $146 million in safety savings (1,256 fewer heavy truck crashes); • $147 million in sustainability savings (162 million gallons of fuel saved, 1.8 million tons of CO2 eliminated); • $261 million in highway maintenance savings (1.263 billion truck VMTs reduced); • Estimated benefits to the public of $192,744,820: – State of good repair: $30,412,780; – Economic competitiveness: $63,153,951; – Livability: $65,732,881; – Safety: $16,387,595; and – Sustainability: $17,057,613. In te rm od al U ni ts (t ho us an ds ) Source: (NS Government Relations 2016). Note: “1-3Q” indicates that the 2016 figures in the graph are only for the first three quarters of the year. Figure 38. NS intermodal network.

128 Impacts of Policy-Induced Freight Modal Shifts The project would also result in a reduction of 196,762,103 vehicle miles. By 2030, the project will create 122,000 jobs. Benefits would accrue to 15 states along the corridor, ranging from a low of $510,000 in Delaware to a high of $42.7 million in Virginia. The project will generate revenue of $16 for every $1 of investment between 2011 and 2030, and $25 for every $1 of investment by 2040. Again, the report estimates that the project would take 1.3 million long-haul trucks off congested highways each year (Abbot 2016). The company sees technology advances as critical to enhancing operating efficiencies, cus- tomer service, and safety. NS was the first railroad to offer a user-friendly mobile app to reduce time spent at intermodal facilities (Abbot 2018). Epilogue—Lessons Learned The major lesson learned from the Crescent Corridor is that the transportation planning community has a lot to learn about mode shift, its causes, and its effects. There is a need for better tools to predict the effects of mode shift policies and investments. This is not to say that the Crescent Corridor cannot be a success or was not a good investment, but the evidence so far does not support the forecasts. Some observers have questioned the feasibility of the Crescent Corridor. A group called Rail Solution notes (Foster 2015), Big trucking companies such as Schneider, Swift, and J. B. Hunt have made great use of the domestic inter- modal concept, when they find it cheaper to ship their containers by rail than to drive them over the road. But the downside is that this business requires mega-terminals requiring hundreds of acres, so they are not easy to construct. The cost and delays associated with moving and transferring containers through these huge termi- nals are such that railroads need a long haul to amortize these up-front outlays. An example from the I-81/I-40 Corridor, which Norfolk Southern calls its “Crescent Corridor” . . . has annoying limitations. The trains are long and slow, and few endpoints are served, so the service is not nimble enough to be truly truck-competitive. Source: (NS Government Relations 2016) Figure 39. Intermodal and truck market share for key origin-destination pairs—Crescent Corridor.

Freight Mode Shift Case Studies 129 NS officials have stated that there is potential for more growth through Greencastle, Pennsylvania; Hagerstown, Maryland; Washington, D.C.; and Baltimore, Maryland. In addition, as trucking companies and their drivers face increasing regulation, the potential for moving freight off the highways and onto rail lines continues to grow. For railroads, the challenge in part is to match the delivery commitments and flexibility that trucks offer. “The key is predictable, on-time service” (Huso 2016). The Wall Street Journal has noted (Smith 2018), High demand for trucking companies is driving the cost of shipping up. Revenue per loaded mile was up 19.9 percent last quarter year over year at the largest truckload company in the U.S., and revenues are up across the board. The Cass Truckload Linehaul Index measures per-mile pricing and was up 9.8 percent in September 2018 compared to September 2017. Wages are rising for drivers and fuel prices are also up, and consumer goods companies like Procter & Gamble are anticipating trucking costs will rise 25 percent this fiscal year. The Heartland Corridor According to NS, the Heartland Corridor is the most direct high-capacity intermodal route between the mid-Atlantic and Midwest (see Figure 40). The result of a $397-million Source: (NS 2014b) Heartland Corridor Heartland Connector Figure 40. Map of NS Heartland Corridor.

130 Impacts of Policy-Induced Freight Modal Shifts public-private partnership completed in 2010, the corridor connects the Port of Virginia to major destinations in the Midwest including Chicago, Detroit, Columbus and Cincinnati (FHWA 2014c). The partnership included NS, FHWA, and the states of Virginia, West Virginia, and Ohio. The 3-year project included the following major components: • The “Central Corridor Double-Stack Project,” which raised clearances in 28 tunnels and 24 other overhead obstructions to allow the transport of double-stack intermodal trains between Roanoke, Virginia through West Virginia to Columbus, Ohio; • Additional track and intermodal capacity improvements at the Rickenbacker Airport in Columbus, Ohio; and • New intermodal terminals built in Roanoke, Virginia, and Prichard, West Virginia. Prior to the Heartland Corridor, NS was forced to use the Norfolk and Western main line across Virginia, southern West Virginia, and Ohio to carry double-stack trains through Harrisburg or Knoxville. The Heartland Corridor project cut nearly 200 miles from each double-stack container moved to Chicago and reduced Norfolk-to-Chicago transit times from 3 days to 2 days. The corridor also enabled next-day service to Columbus, Ohio, from Norfolk, Virginia (Railway Gazette 2010). Key benefits realized by the completion of the corridor include the following: • Reduced transit times and costs for shippers via the corridor; • Improved mobility for truck freight and passenger cars attributed to diverted truck traffic; • Environmental benefits from reduced truck emissions; • Economic development and tax and employment opportunities from the introduction of new intermodal facilities along the corridor; and • Improved access to global trade routes through Port of Hampton Roads for shippers and manufacturers in Virginia, West Virginia, Ohio, and eastern Kentucky. Project Policies, Programs, and Motivations The Heartland Corridor concept grew out of a combination of NS seeking to improve rail- way efficiency and growing public concerns over rising demand for freight transportation, increased highway congestion, and diminishing truckload productivity. Reduced truck pro- ductivity or efficiency is attributed to congestion-related delays, fuel costs, hours-of-service regulations, and air quality requirements, as well as a growth in truck VMT outpacing highway lane capacity. These issues pushed the Heartland Corridor concept to the forefront of the surface transpor- tation reauthorization process, and it became one of several “Projects of National and Regional Significance.” In fact, the project is referred to twice in Public Law 109-59, the Safe, Account- able, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). At Sec- tion 1301(m)(2), the project is described as the “Heartland Corridor Project including multiple intermodal facility improvements and improvements to facilitate the movement of intermodal freight from VA to OH.” Section 1702, Project No. 5072, describes the Heartland Corridor as “Double-stack clearance of tunnels on the Norfolk and Western Mainline in Virginia located on the Heartland Corridor” (FHWA 2014c). SAFETEA-LU designated the FHWA as a sponsor agency, and three states, FHWA, and NS formed a public-private partnership. This partnership affected the initial flow of over $191 million in project funding, including $83.3 million in federal SAFETEA-LU funds, $9 million from the Virginia Rail Enhancement Fund, $0.8 million from an Ohio Rail Development Commission grant, and $97.9 million from NS. The final total cost was around $320 million (Railway Gazette 2010).

Freight Mode Shift Case Studies 131 Lessons Learned The motivations for this project or policy encompass a variety of goals for which mode shift represents an overall proxy. The goals include reductions in fuel use and emissions, easing of congestion, improvements in safety, increases in carrier efficiencies and concurrent reductions in shipper costs, and positive contributions to economic development. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations? The ability of the Heartland Corridor to cause mode shift is a direct function of the reduced cost that results from the ability to both double stack containers and reduce travel distances by nearly 200 miles. As the Assistant Vice President of Government Relations for NS, Darrell Wilson, stated in an interview for this case study, “On the Heartland Corridor, the freight usu- ally has been on a ship for a couple of weeks. As such, the time sensitivity of these international shipments is lower than for domestic loads, so there is more flexibility. As a result, Norfolk Southern predicated the Heartland Corridor more on cost” (Wilson 2014). The emergence of the Heartland Corridor as a project and the influence of public policies in the project are complicated; there was no single owner of the concept. The finished proj- ect represented a concurrence of needs and ideas that gradually transformed into a viable infrastructure project that yielded substantial benefits to a wide range of public and private stakeholders (Wilson 2014). The project was jump-started by the SAFETEA-LU legislation and the formulation of the public-private partnership, which laid the groundwork for a coalition of stake holders to plan and administer the approximately $191 million dollars in initial funding. As the Senior Chairman of the Intermodal Transportation Institute Board of Directors and former FRA administrator Gilbert E. Carmichael stated, “The Heartland Cor- ridor has become a model of collaboration, cooperation, and innovation. You have proven that our often-fragmented modes of transportation can work together, and you have dem- onstrated the potential of building successful new public and private partnerships. Perhaps most importantly, you have participated in the creation of a powerful new link in the global supply chain that will stimulate economic growth and opportunity” (Appalachian Regional Commission 2009). The transferability of the Heartland Corridor concept is somewhat limited in that the corri- dor itself is unique and the opportunity to double stack and reduce travel distance on that scale may not exist elsewhere in the United States. On the other hand, the model of collaboration and cooperation, coupled with the public and private partnership model, may offer promise for other mode shift projects. Epilogue—Recent Developments This $320-million public-private partnership of NS, Virginia, West Virginia, Ohio, and the federal government opened in 2010, providing efficient double-stack rail routing from the Port of Virginia to the Midwest via Columbus. Double-stack container trains previously had to travel longer routes due to insufficient vertical clearances along the mainline rails. Some intermodal terminal facilities offered hi-tech ramps, weigh-in-motion scales, advanced container stackers, and enhanced security features. The Heartland Corridor reduced transit times from Norfolk, Virginia, to Chicago, Illinois, by a day (from 3 or 4 days previously) and is 250 miles shorter than previous routes. This was the first time the private freight rail industry worked together with the U.S. DOT to develop and finance a rail improvement project.

132 Impacts of Policy-Induced Freight Modal Shifts The Heartland Corridor also included the following: • West Virginia’s first intermodal terminal, the Heartland Intermodal Gateway (HIG). • A mega-intermodal facility at the former Rickenbacker Airport in Columbus, Ohio (opened March 2008). • A new intermodal facility in the Roanoke, Virginia, region. • Relocation of the Commonwealth Railway into the median of the Western Freeway in Portsmouth, Virginia. • Corridor extension to include NS’s Columbus-to-Cincinnati line (operational December 2010).3 The Heartland Corridor project included development of West Virginia’s first intermodal terminal, the HIG, a truck-to-rail cargo transfer facility, which opened in December 2015 fol- lowing a decade of planning and more than 5 years of construction (National Association of Counties 2016). HIG, a 100-acre facility, was strategically selected and is located 1 mile from the center point of the NS Heartland Corridor. It provides state-of-the-art equipment and services. A cost analysis report determined that companies that ship through HIG can expect savings of $670 per container compared to direct trucking to the Port of Virginia. The West Virginia DOT and Public Port Authority projected that HIG would reduce private-sector logistics costs by approximately $17.5 million annually by 2025 (West Virginia Public Port Authority 2015). Recently, DARCO International, a leading provider of post-operation, trauma, and wound care solutions to the global foot and ankle community, became the first company since Toyota to utilize the HIG facility for the continuous shipment of its inbound freight containers. Sup- porters saw this as proof of concept for containerized shipments to and from the Port of Shanghai and a model for companies in the region (Lieving 2018). However, some sources report the HIG is off to a “slow start” (Castro 2018). The HIG has unused capacity and is search- ing for additional customers. According to a facility representative, one “bottleneck” up until recently was obtaining and maintaining sufficient numbers of chassis. Currently, trains run three times per week. For the latest quarter for which there are data, the HIG experienced 184 lifts from June to August 2018, a volume somewhat lower than volume in previous quar- ters. Toyota has been the leader in volume since HIG commenced. However, the HIG also accommodates one-off shipments from independent shippers, such as a recent load of pianos handled by the facility.4 Expectations for the new facility were optimistic. The West Virginia Port Authority Director said that the expectation was that the facility would receive 30,000 container movements annu- ally within 100 miles (Akron Railroad Club Blog 2015). It guaranteed 3-day-per-week service to Norfolk and 3-day-per-week service to Chicago. To break even, the facility requires approxi- mately 1,200 lifts per month. In February 2017, the facility had 100 lifts, demonstrating “prog- ress” according to a local development council representative (Pace 2017). The Rickenbacker Intermodal Terminal underwent a $34-million expansion including upgrading the rail facility by adding a lift crane and lengthening existing lift tracks by thousands of feet. Lift capacity would increase to 300,000 per year from 210,000 (Weese 2015). Construc- tion would be completed in 2018. In other developments, CSX Transportation in 2018 filed a complaint against NS and a ter- minal railroad claiming a conspiracy to block CSX access to the intermodal terminal at Virginia Port Authority’s Norfolk International Terminals. This blocks CSX access to the Heartland 3 FHWA Center for Innovative Finance Support – Project Profiles. Project Profile: Heartland Corridor. 4 Personal communication with unidentified HIG company representative on 10/26/2018.

Freight Mode Shift Case Studies 133 Corridor owned by NS (Edmonson 2018). Also, to increase efficiencies, in 2016 NS combined divisions, consolidating its Virginia and Pocahontas divisions to form a new Pocahontas Division that merged operational control over the Heartland Corridor. It will be located in Roanoke, Virginia (NS 2016). NCFRP included a case study of the Heartland Corridor in NCFRP Research Report 38: Guide for Conducting Benefit-Cost Analyses of Multimodal, Multijurisdictional Freight Corridor Invest- ments (Vadali et al. 2017). This retrospective analysis examined the existing alternative routes for three origin-destination pairs. It walks readers through the steps required to conduct a benefit-cost analysis, from defining the project to the final presentation of results. The authors state that the purpose of the case study is “to showcase the methodology and development of a conceptual analysis of a multistate endeavor and the ability to extract the most value from avail- able public domain data.” They conclude that, for all three origin-destination pairs combined, the realized benefits through shipping cost savings and reduced inventory costs are significant. Overall, the authors report, the benefits are greater than the capital cost and operating cost incurred. However, they note that all analyses are purely illustrative. Epilogue—Lessons Learned The primary purpose of the Heartland Corridor was to improve intermodal efficiency by allowing double stacking of containers, thereby reducing transit times and rail shipping costs. The focus was less on mode shift, as the share of intermodal shipments for the origin-destination pairs that the corridor would serve were already extremely high. As previously stated, Figure 39 provides intermodal and truck market shares for a variety of origin-destination pairs for differ- ent NS corridors. As Figure 39 shows, the corridors that the Heartland Corridor served already had intermodal shares of over 80 percent. Despite these already high shares, available evidence indicates that the Heartland Corridor was still able to attract additional intermodal volume. As previously stated, Figure 38 provides data on annual intermodal units on the Heartland and Crescent Corridors between 2010 and 2016. Intermodal units on the Heartland Corridor doubled in that time, from approximately 175,000 to 350,000 units. It is unknown to what extent these increases are due to mode shift and to what extent they are due to an improving economy and new business. However, a lesson learned is that policymakers should explore investments that greatly improve efficiency at a reasonable cost and implement them where they appear feasible and efficient. However, there is also a cautionary tale in the case of the HIG. Federal and state agencies spent over $30 million on the HIG, while NS provided only $1 million. In the third quarter of 2018, the facility only moved 184 containers, well below the forecast of 30,000 a year and the break-even amount of 14,400. While this may have been a slow quarter, and the facility is less than 3 years old, operating at 5 percent of the break-even amount portends a difficult situa- tion. Siting a speculative intermodal facility in a rural area outside a smaller city is risky public policy, especially with such a modest contribution by the railroad company. In this case, the facility was fully built out. It might have been wiser to phase the investment as the volume grew and as major shippers committed to the region. The CREATE Program The CREATE program is a collection of rail and roadway improvement projects designed to increase the efficiency of the region’s passenger and freight transportation system. Identified as a “Project of National and Regional Significance” in SAFETEA-LU, this

134 Impacts of Policy-Induced Freight Modal Shifts $3.8-billion public-private partnership consists of over 70 different projects (see Figure 41). Members of the partner ship include the following: • U.S. DOT’s FHWA and FRA; • The Illinois DOT; • Six major freight rail carriers, including BNSF Railway, Canadian Pacific Railway, CN, CSX Transportation, NS, and Union Pacific Railroad; and • Two passenger train systems (Amtrak and Metra) (CREATE 2014b). Since 2003, these program partners have collaborated and programmed the following projects for funding and implementation: • 36 different rail infrastructure and technology upgrade projects that will increase speed capac- ity by eliminating shared rail conflicts; • 25 road/rail grade and 6 passenger/freight rail grade separations to improve safety and system speed; • Grade crossing safety improvements; • Common operational picture, which is the integration from dispatch systems of all major railroads in the region into a single display; • 50 miles of new track to link yards and create a second east-west route across Chicago; and • Improvement of roadways, sidewalks, and drainage of railroad viaducts. As shown in Table 53, the CREATE program received funding from a mix of federal, state, and private sources from 2005 to 2010. As of November 2013, 20 of 60 projects were complete; nine others are under construction (CREATE 2014b). Source: (CREATE 2014a) Figure 41. CREATE partners—Class I rail networks.

Freight Mode Shift Case Studies 135 Following the completion of just 20 of the projects, the CREATE program achieved a signifi- cant reduction in delays experienced by freight and passenger trains, as well as freight trucks and passenger automobiles. For example, before CREATE, it took approximately 48 hours for freight trains to pass through the Chicago intermodal rail terminal. Today, the same trip takes only 32 hours (CREATE 2014b). Highway congestion also improved as a result of new overpasses and underpasses at railroad crossings throughout the Chicago region and avoidance of trucks traveling on the highways due to increased rail capacity. These projects have an estimated savings of 2,400 hours per day for motorists, and 1,400 hours per day for bus passengers (CREATE 2014d). Without CREATE, a portion of future increases in freight traffic would be diverted to truck. The program projected an estimated 85 billion vehicle miles of truck traffic will be avoided when all CREATE projects are completed. This would prevent an estimated 100 fatalities and 16,800 injuries on the high- ways due to trucks over a 30-year period (CREATE 2014d). Project Policies, Programs, and Motivations Chicago is one of the most active rail hubs in the country, as well as the largest chokepoint for freight. Approximately 500 freight and 760 passenger trains travel through the region on a daily basis. The region handles 37,500 railcars each day, almost one-fourth of the nation’s freight rail. Six of the seven rail companies in North America and two Canadian railroads access the region. These rail lines were built over a century ago; designers of these rail lines did not envision cur- rent volumes of freight and passenger traffic. The average speed of freight trains is 5 to 12 miles per hour. Trains that typically travel over 2,200 miles from Los Angeles to Chicago in 48 hours spend an average of 32 hours traveling within the Chicago region alone (CREATE 2014b). The FHWA FAF forecasted that rail trade in Chicago would triple in value and double in weight from 2011 to 2040 (CREATE 2014b). The increase in freight rail traffic has brought congestion, which has resulted in delays, highway congestion, air pollution, safety concerns, and interference with intercity and commuter trains. Local highways and streets are faced with over 2,500 at-grade crossings, idling trains, and outdated rail crossing safety equipment. In fact, many at-grade crossings are located less than a train length apart. Existing flyovers do not have sufficient clearances to support double-stack trains. Passenger trains in the Chicago region often operate on the freight-owned or -controlled tracks, which results in schedule conflicts and delays (CREATE 2014b). Year Funding (Millions) Source 2005 $100 SAFETEA-LU authorization 2005 $100 Private railroad funding pledge 2007 $48 Federal funding released 2008 $23 Federal funding released 2009 $19 Federal funding released 2009 $400 State of Illinois Capital Bill authorization 2009 $1.90 FY 2009 Federal Railroad Relocation Funds authorized 2010 $100 TIGER funds awarded 2010 $133 American Recovery and Reinvestment Act high- speed rail funds awarded Source: (CREATE 2014c) Table 53. CREATE program funding timeline.

136 Impacts of Policy-Induced Freight Modal Shifts In 1999, the “New Year’s Blizzard” struck the Midwest with 22 inches of snow that crippled the region’s rail system. Freight trains were stalled or delayed 12 to 24 hours, causing ship- ment delays between the East and West Coasts lasting 1 to 4 days. As a result, several orga- nizations, including the Association of American Railroads, the Chicago Planning Group, and the Chicago Transportation Coordination Office, undertook planning and coordination initiatives to identify operational inefficiencies that contribute to the region’s rail reliability issues. These initiatives eventually formed the basis for the CREATE program (DiJohn and Tenebrini 2010). In 2001, Mayor Richard M. Daley called on the federal Surface Transportation Board to con- vene a task force to develop a solution to the growing problem. The resulting task force—made up of representatives from the U.S. DOT, the railroad industry, the state of Illinois and the city of Chicago—issued a “Joint Statement of Understanding,” which led to the CREATE program in June 2003 (CREATE 2014a). In 2005, CREATE received $100 million in funding from the SAFETEA-LU authorization. The CREATE program was eligible because it was nationally recognized as a single project that would produce great public benefit, and it was declared a Program of National and Regional Significance, a designation that was developed to provide funding for high-cost surface trans- portation system improvements of national or regional importance. Lessons Learned The motivations for this project or policy encompass a variety of goals for which mode shift represents an overall proxy. These goals include reductions in fuel use and emissions, easing of congestion, improvements in safety, increases in carrier efficiencies and concurrent reductions in shipper costs, and positive contributions to economic development. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations? The ability of the CREATE program to cause mode shift is a direct function of improve- ments that increase rail speeds, reduce conflicts with vehicular traffic through grade separation, reduce truck movements through additions of rail track, and increase rail productivity through technology and operational improvements. As stated previously, an estimated 85 billion vehicle miles of truck traffic will be avoided when all projects in the CREATE program are completed (CREATE 2014d). The emergence of the CREATE program and the influence of public policies represent the first time that federal, state, and local governments have partnered with the railroad industry to solve the problem of automobile and rail congestion on a regional scale. It is also the first time multiple competing railroad companies have partnered and committed funds to increase the efficiency of an urban rail network. In fact, six of the seven major railroads operating in North America pass through Chicago (FHWA 2014d). Six of those railroads are partners in the CREATE program, and have pledged to contribute $212 million to the $3 billion CREATE pro- gram. The establishment of partnership and recognition of the project by the federal govern- ment, Illinois State Legislature authorization of SAFETEA-LU, and a State Capital Bill made the program projects possible. The transferability of the CREATE program concept is somewhat limited in that the prob- lems faced in the Chicago area are unique both in terms of scale and the number of railroad

Freight Mode Shift Case Studies 137 companies involved. On the other hand, the model of collaboration and cooperation, coupled with the public and private partnership, may offer guidance and promise for smaller mode shift projects in other urban areas. Epilogue—Recent Developments The CREATE program has continued to move projects forward and to complete them. Costs of the program have also continued to rise. Table 54 provides the status of CREATE’s 70 projects. Currently, there are 29 completed projects while another 5 are under construction. From 2014 to 2017, CREATE completed nine more projects. Figure 42 provides a sum- mary of overall project status. The graphic portrays a pattern of steady completion of projects from 2010 to 2017; however, the lack of new projects entering construction, final design, and environmental/preliminary engineering from 2014 to 2017, points to a slowing in project com- pletion over the next few years. The cost of the program has risen over the years. Cost estimates for the entire program were only $1 billion in 2003, but had risen to a projected $3 billion by 2010 (Stagl 2010). The estimate rose to $3.8 billion in 2014 and stood at $4.4 billion in 2018. More than $1.4 billion has been committed, as of February 2018, from federal, state, local, and private railroad sources. Comple- tion of the full program of projects will require an additional $3 billion.6 In June 2018, it was announced that the Illinois DOT would receive $132 million in federal funding from the U.S. DOT for CREATE to fund the 75th Street Corridor Improvement Project. The project will separate several passenger and freight rail lines in a number of neighborhoods known to have congestion, delays, and train idling (Illinois DOT 2018). The project will illumi- nate “the most congested rail chokepoints in the region” according to the Mayor’s press release (Office of the Mayor, City of Chicago 2018). The federal funding will leverage contributions by the other partners for a total investment of $473 million. This level of funding will complete the first half of the 75th Street Corridor Improvement Project. Chicago officials broke ground on October 1, 2017, for the nearly $500 million rail improvement project and expect a 2025 date for construction completion. Another project to upgrade signals and add several crossover tracks around Canadian Pacific’s Bensenville Yard began in 2017. It should reduce delays and congestion while improving safety for pedestrians and drivers at nearby grade crossings. Officials have scheduled a 2019 date for construction completion. Project Status Number of Projects Completed Projects 29 Under Construction 5 Final Design 4 Environmental Review 13 Remaining Projects 19 Total 70 Source: (CREATE 2017) Table 54. Status of CREATE projects.5 5 CREATE Program: Status Update – February 2018. 6 CREATE Program: Status Update – February 2018

138 Impacts of Policy-Induced Freight Modal Shifts Epilogue—Lessons Learned The CREATE program is an example of a successful public-private rail partnership that rec- ognizes the challenges of accommodating both freight and passenger rail needs in a highly con- gested environment (Goetz et al. 2016). According to FHWA, CREATE represents the first time state and local governments have collaborated with the railroad industry to solve the problem of automobile and rail congestion on such a large scale. CREATE also is the first time so many competing railroads have come together as partners to increase the efficiency of an urban rail network. Six of the seven major railroads operating in North America pass through Chicago. All six of those railroads are partners in the CREATE program.7 Officials like Randall Blankenhorn, secretary of the Illinois DOT, hope the CREATE proj- ect can serve as an example for how long-term projects can be funded in future years, as state budgets like that of Illinois dwindle, and railroads continue to battle it out for federal funding. Blankenhorn said it is important that government and railroad officials work to find new ways to carry out partnerships. “I think this project is the way that’s going to happen in the future,” Blankenhorn said. “We all have things that we want to get done, and on this project in particular, we all came together with a common goal to figure out how to solve one of the nation’s largest freight bottlenecks” (Stagl 2016). While partnerships can provide benefits to multiple parties, it is also important that the par- ties pay a share of the costs that approximates their benefits. These programs should not over- subsidize private parties. One observer noted, “The biggest beneficiaries of this project are the Source: (CREATE 2017). Revised June 15, 2018. Figure 42. CREATE overall project status. 7 https://www.fhwa.dot.gov/ipd/project_profiles/il_create.aspx

Freight Mode Shift Case Studies 139 freight railroads, yet they are going to pay a measly 25 percent (approx.) of the project” (Wronski 2018). According to the Chicago Tribune (2017): CREATE, however, is supposed to be a public-private partnership, not solely a government endeavor. Lipinski says the railroads should shell out more money for CREATE projects. We agree. Yes, it’s natural for businesses to want to focus their money on infrastructure that mostly benefits them. Yet CREATE projects will benefit the rail companies as much as they benefit the region and the nation. Solving the 75th Street bottleneck will do more than help motorists and Metra commuters; it will shave shipping costs through faster transit times for rail cargo. Grade separations at crossings will allow freight rail to move faster through this metropolis. As bad as the bottlenecks are now, they’re only going to get worse. Daily volumes of rail cars passing through Chicago are projected to more than double by 2045, the Illinois Department of Transporta- tion says. The railroads can avoid tomorrow’s worse gridlock by paying their fair share now. Albany Express Barge PANYNJ continually searches for alternative routes to move containerized cargo to and from ports to avoid increased amounts of road, bridge, and tunnel congestion. The following case study explores the Albany Express Barge service, which ran between 2003 and 2006, and dis- cusses the policies, regulations, and changing economic conditions behind recent plans to restart the service. In 2003, PANYNJ, in cooperation with the Port of Albany and Columbia Coastal Transport, a private containerized cargo feeder service firm, began offering the Albany Express Barge ser- vice (PANYNJ 2002). This COB service moved containers from Port Elizabeth in New Jersey up the Hudson River to the Port of Albany. The service received $5.3 million in Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds, which jump-started the project. The CMAQ funding provided reimbursement of up to 80 percent of the operation’s net deficit. The state of New York also provided $2.4 million to purchase the harbor crane used to unload the barges (Franchini 2014). The CMAQ and state funding allowed the barge service to undercut the trucking rate by nearly 22 percent in transit cost per container (American Association of Port Authorities 2005). The Albany Express barges carried containers containing less time-sensitive bulk commodi- ties such as timber, scrap metal, paper, and silicon upriver to Albany. The transit time for these trips was 18 hours, compared to 12 hours by truck. The New York State DOT estimated that the service would save about $1 million each year on highway maintenance and reconstruction costs (Franchini 2014). The Albany Express service was suspended in 2006, with reasons cited as lack of funding (that subsidized the transportation rates), lack of interest from shippers, and higher-than-anticipated transportation costs. At the start of the project, the Albany Express service offered trips twice a week, but shortly after cut trips to once a week due to low demand. In 2003 and 2004, the Port of Albany handled 512 containers and 4,243 containers, respectively. In 2004, more than 6,000 con- tainers were projected (Franchini 2014). However, by the time it ceased operation, the Albany Express Barge service had transported only 8,486 containers. This translated into fewer than 30 containers per trip on barges that could handle 240 containers (Anderson 2014b). Unantici- pated transportation costs also negatively affected the service. Existing contract terms required the service to pay stevedores overtime rates, which increased overall costs by 50 to 75 percent over planned rates (Franchini 2014). In May 2014, planners at the Port of Albany revisited the Albany Express Barge concept in response to changing economic conditions and anticipated growth in traffic in the region (Anderson 2014a). Recent events have created an environment where a new barge service might flourish. These events include new longshoremen contracts that reduced rates for barges, increased barge canal traffic, increased road congestion around the New York City Port, and a

140 Impacts of Policy-Induced Freight Modal Shifts recent shortage in truck drivers (Franchini 2014). The following section describes the history of these motivating factors in both the original and planned new service in more detail. Project Policies, Programs, and Motivations This section explains the original and planned barge services. Original Service (2003–2006). During a presentation at the Port of Albany’s Industry Day in May 2014, Mr. Michael V. Franchini of the Capital District Transportation Committee (CDTC) stated that the initial concept for the container barge feeder service began in the early 1980s. Approximately 85 to 87 percent of all cargo arriving by ship at New York area ports was leaving via truck (Franchini 2014). These trucks faced delays caused by long queues dockside and congested New York metropolitan area highways and bridges. These added delays and tolls pushed transportation costs higher and reduced reliability. A feasibility study was conducted to explore the option of a COB service to address these issues. The study concluded that the service was a viable development option that should be explored by the Albany Port District Commis- sion. Subsequent studies identified the types of facilities, operations, and potential costs for service. The Commission found that the service could be profitable if it moved between 16,000 and 24,400 20-foot equivalent units annually over a period of 3 years (Franchini 2014). These plans laid the foundation for the Albany Express Barge service and facilitated project planning, CMAQ and state funding, and full implementation in 2003. Planned New Service. In 2014, the Albany Port District Commission began an effort to restart the Albany Express Barge service after receiving interest from shippers and carriers. The Albany Port District Commission is currently developing a 3-year business strategy that will establish milestones and monitor project progress. This work includes securing funding from the U.S. Maritime Administration (MARAD), New York state economic development agencies, ports, and state and federal air quality programs. Other planned activities include new marketing campaigns to develop interest and demand for shipping containers, establishment of an industry and public-sector working group to advise and assist with operational planning, and the devel- opment of a strategy to address the issues that halted the original service. This approach will help ensure that the new service addresses the concerns expressed during the original service’s operation regarding trip frequency, reliability and costs (Anderson 2014a). The motivations behind this planned new service include changing logistical conditions. For example, the completion of the enlarged Panama Canal in 2015 will increase the number of large container ships arriving on the eastern seaboard, including at the Ports of New York and New Jersey. These ports already face limited container storage. As a result, the ports will need to move the containers at faster rates to make room for arriving cargo. In addition, longshoremen contracts in the Ports of New York and New Jersey have changed. The contracts include rates for container barges that did not exist in 2006. The rates are approximately one-half the costs of the rates for container ships (Franchini 2014). New regulations and policies are also driving the renewed interest in the barge service. The Energy Independence and Security Act of 2007 directed MARAD to identify waterways that can serve as short sea shipping routes. The National Defense Authorization Act of 2009 allocated federal funding for financially viable shipping routes that cover up to 80 percent of the total project cost. In 2010, MARAD implemented this program and began supporting the develop- ment of a marine highway network nationwide. These policies formalize support for COB services and prioritize funding for these projects (Franchini 2014). While economic and transport cost conditions have changed since 2006, the New York City metropolitan area remains a nonattainment area for air quality. The region is still pushing to

Freight Mode Shift Case Studies 141 reduce air emissions and traffic congestion. The CDTC estimates that a barge carrying only 100 containers once a week would eliminate 100 tractor-trailer trips. This would translate into a reduction of nearly 800,800 truck miles annually (Franchini 2014). Lessons Learned The motivations for the Albany Express Barge service encompass a variety of goals for which mode shift represents an overall proxy. These goals include reductions in fuel use and emis- sions, easing of congestion, improvements in safety, increases in carrier efficiencies and concur- rent reductions in shipper costs, and positive contributions to economic development. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations? The purpose of the Albany Express Barge service was to cause mode shift. PANYNJ deter- mined that 85 to 87 percent of all cargo arriving by ship at New York area ports left by truck. This trend created dockside truck congestion and contributed to congestion on the region’s bridges, tunnels, and streets. The state also concluded that this port-related congestion was a major factor in the state’s air quality nonattainment. The emergence of the Albany Express Barge service is a direct result of several public policies enacted at the state and federal level. To reduce the heavy reliance of port customers on trucks to move cargo and to improve air quality, the PANYNJ and New York State DOT secured the CMAQ funding needed to make the barge service competitive with existing trucking service costs. The state also allocated state funds to purchase the infrastructure. The transferability of the Albany Express Barge service concept as a project is applicable to areas where major ports have direct waterways to smaller feeder ports. An analysis of this case study identified the following key elements of a viable COB service: • Barge transportation costs must compete with truck alternatives. Planners must carefully factor potential added costs such as harbor maintenance taxes and labor and lift costs into the overall transportation rate cost (Congressional Research Service 2011). • Niche markets for goods, particularly shippers of less time-sensitive products, must be iden- tified and marketed to in advance. Understanding and addressing these shippers’ needs and concerns will ensure a consistent level of service demand. • Communication of benefits for all actors. Each actor involved in the project, from agencies at every level of government to shippers, carriers, and the intermodal operator, must under- stand the wide range of benefits of the service. Planners must document and communicate the collective impacts of the project. For example, federal and state agencies will experience benefits in air quality; reduced fuel consumption, emissions, and congestion; and economic development. Carriers, shippers, and truckers benefit from improved efficiency, lower costs, and more reliability. Hub and feeder port benefits include improved throughput of cargo, additional revenue, and potential subsidies for infrastructure expansion. Communicating these benefits will help build partnerships and maintain support for the project. While the initial project failed, the lessons learned from the experience are shaping the planned restart of the Albany Express Barge service. Additionally, the Port of Richmond, Virginia, on the James River (upriver from Hampton Roads’ ports of Norfolk, Portsmouth, and Newport News) is an example of a medium-size inland port that has maintained a container service for several decades. These lessons, coupled with the public and private partnership model, may offer promise for other mode shift projects.

142 Impacts of Policy-Induced Freight Modal Shifts Epilogue—Recent Developments The plans to restart the Albany Express Barge service that began in 2014 had yet to reach fruition by 2018. The Port of Albany is known for its ability to handle oversized, heavy pieces of equipment—in addition to grain and other commodities—making it a so-called “major heavy lift project cargo port.” The Albany Port District Commission undertook a strategic assessment and growth strategy in 2016 to understand market opportunities and potential growth patterns. Positioning the Port of Albany to support the COB service with the Port of New York and New Jersey was an Albany Port District Commission goal. Investment in the port looked to bolster the port’s reputation as the northernmost inland port in North America in operation year-round and ice-free. In its 2016 regional freight and goods movement plan report, in the Strengths, Weaknesses, Opportunities and Threats Analysis, the CDTC characterized COB service from PANYNJ to the Port of Albany as an “opportunity.” CDTC recognized that the expansion of the Panama Canal was one factor that could spur an increase in port traffic. The expansion could be used to justify facility development that would enable the port to handle this increased traffic. That much of this new cargo would not be time-sensitive added credence to the feasibility of the undertaking (Anderson 2014a). In addition, congestion around the New York City Port and a shortage of truck drivers lent credibility to the new barge service (Anderson 2014b). The barge service was included in CDTC long-term plans, although it was recognized that additional investments in facilities and operations would be required to make the service viable. The CDTC plan did not specify the costs of the improvements. Although the Albany Port District Commission recognized that the earlier venture in COB service between New York City and Albany was financially unviable, it argued that current condi- tions could present additional opportunities (CDTC 2016). The previous venture was thwarted primarily by a lack of backhaul volume, as almost all of the containers would return empty. In addition, shippers were unwilling to make commitments to the barge service, found the service unreliable, and the frequency of service did not meet the scheduled intervals. Mounting costs, including higher-than-anticipated rates for stevedores, also marred service. The new plan for barge service faced additional headwinds. In 2017, New York state passed a law restricting where oil barges could anchor in the Hudson River, despite the Coast Guard proposing 10 new anchor- ages 2 years earlier (Dendis 2017). The Coast Guard has deferred a final decision on the new Hudson River anchorages (Moore 2018). Global Partners, a firm that handles crude oil shipped by Hudson River barges and tanker trains, announced in 2018 that it would scale back opera- tions at the Port of Albany after environmental groups and local residents opposed a planned expansion. However, Global Partners planned to resubmit a scaled-back renewal application in 2018 (Lucas 2018). Despite the hindrances, the press has reported some progress. Ardent Mills, a Denver-based flour and grain milling company, will be taking over the operations of a grain elevator at the Port of Albany formerly operated by Cargill, a major food conglomerate (timesunion 2018). Although grain was one of the port’s top commodities, in 2017, Cargill shipped no grain out of the Port of Albany. The grain elevator is capable of loading grain onto freighters but is not equipped to offload shipments. It will require modifications to accept grain shipments to Ardent Mills (Nearing 2018). In addition, while exports declined in 2017, imports offset this reduction. Imports reached a 15-year high, while exports hit a 10-year low (Center for Economic Growth 2018). Port projects including warehouse construction and reconstruction of the wharf, are moving forward (Buxbaum 2018). A question mark in this expansion is General Electric, the port’s largest customer. The company was undergoing a major overhaul following a significant decline in its stock price (Jersen News 2018). Its use of the Port moving forward is uncertain. Another source of uncertainty for the Port of Albany, as at other ports, is the effect of new tariffs.

Freight Mode Shift Case Studies 143 The Trump administration’s tariffs on foreign goods are yet to be felt, but have administrators concerned. Epilogue—Lessons Learned The major lesson learned through this case study is that mode shift from truck to COB is difficult to establish and, in many instances, has yet to prove successful. The major challenge is the requirement of a large volume of containers for the shift to be economically viable. According to Scott Davies, director of the America’s Marine Highway Program, the freight community has to be onboard. They have to commit to freight (Moore and Hocke 2018). Inconsistent freight has been a recurring problem for some services in the past. COB services face other challenges. Labor issues must be addressed. Rates for stevedores and other staff have proved problematic in some instances. Backhaul is another serious issue; the economics simply don’t work when barges lack sufficient cargo on the return trip or return empty. Factors that promote COB programs are not going away. Congestion at New York and New Jersey facilities makes trucking cargo expensive and time consuming. A shortage of truck drivers may encourage alternative modes, including barge shipments. COB shipments are environmen- tally sustainable, making the programs attractive to governments and the public. Barge ship- ments can run 24 hours a day, 7 days a week. International developments, like the expansion of the Panama Canal, can drive additional traffic to the ports. Truck Route Management and Community Impact Reduction Study Freight in the 10-county New York Metropolitan Transportation Council (NYMTC) region is carried predominantly by truck (see Figure 43). Nationally in 2010, about 30 percent of freight tonnage in the United States was carried by modes other than truck: however, less than 10 per- cent of freight tonnage in the NYMTC region is carried by modes other than truck. The relatively low rail mode share can be attributed in part to limited freight rail connections, especially to geographic Long Island, and in part to historical reliance on rail-to-barge car floats that by the middle of the twentieth century were no longer competitive (NYMTC 2014b). With efficient truck operations vital to the region’s economy, chronic congestion presents a significant problem, as does the need to maintain a state of good repair. Many limited-access highways in the region do not allow trucks, and size and weight limits are more restrictive than federal standards, making freight access even more difficult (NYMTC 2014a). In 2007, several policy changes conspired to restrict truck size and weight in New York City. A first group of these policy changes was an outgrowth of the Truck Route Management and Com- munity Impact Reduction Study (New York City DOT 2007c). Concurrent with the completion of the study, the New York City DOT began to implement many of the study recommendations. These measures aim to improve the overall management of the truck route network, initiate steps that will reduce unnecessary and illegal truck traffic in communities, and provide a com- prehensive update to the policies and regulations that govern truck movement in New York City. These short-term implementation measures, which can be broken down into five distinct categories, included the following: • Creation of the Office of Freight Mobility, • Development and deployment of educational materials and improved public outreach, • Improvements to truck signage, • Enforcement of truck routes, and • A review and update of truck regulations and policies. Source: (NYMTC 2014b) 2007 Figure 43. Mode share by weight for the New York metro area (2007).

144 Impacts of Policy-Induced Freight Modal Shifts Key short-term results included the following: • The New York City DOT incorporated truck route summons into TrafficStat, resulting in a quadrupling of citywide off-route violations from August 2006 to January 2007 (increasing from 860 to 3,419). • In the fall of 2006, the New York City DOT began to develop a pilot program for truck weight monitoring (weight-in-motion) and camera enforcement (New York City DOT 2007b). The second policy change occurred 1 week after the tragic collapse of the I-35W Bridge in Minneapolis, Minnesota, on August 1, 2007. At that time, the Triborough Bridge and Tunnel Authority (TBTA) in New York City restricted the maximum allowable gross vehicle weight for trucks crossing its Bronx–Long Island bridge spans from 105,000 to 80,000 lb. The new regula- tions required trucks weighing more than 80,000 lb with divisible load permits to obtain advance permission from the agency, schedule the crossing, and cross only at night between 11 p.m. and 4 a.m., at a maximum speed of 30 miles per hour, in specific lanes under escort. This effectively eliminated such overweight trucks from serving the city (Jack Faucett Associates Inc. 2007a). Project Policies, Programs, and Motivations The Truck Route Management and Community Impact Reduction Study sought to coor- dinate engineering, education, information, and enforcement efforts to mitigate the negative impacts of truck traffic, as well as to improve the overall truck management framework that exists in New York City. Various city, state, and federal guidelines govern the movement of trucks and commercial vehicles. Many of the truck routes and management techniques within New York City are a vestige of the last comprehensive truck study that DOT began in the late 1970s, and formally completed in 1982. For the most part, the city instituted these guidelines and policies during the 1980s and early 1990s, and they have remained constant since (New York City DOT 2007a). However, the nature of goods movement, land use, and New York City’s infrastructure has changed dramatically over the past 25 years. Three themes reflect the changes in land-use and zoning conditions in industrial and manufacturing areas since the last comprehensive revision of the New York City truck route regulations between 1974 and 1981. The three themes are: 1. The changing nature of industrial and manufacturing uses. 2. The relaxation of zoning regulations governing industrial and manufacturing areas to allow greater residential and mixed use. 3. The arrival of “big box” retailing establishments (New York City DOT 2007a). The Truck Route Management and Community Impact Reduction Study sought to identify and address some of the areas in New York City where trucking, local quality of life, and safety concerns come into conflict and look at methods to mitigate these conflicts and improve the overall management of trucks and commercial vehicles in New York City. One of the greatest challenges was the region’s dependence on truck traffic, with trucks deliv- ering nearly 99 percent of goods. In addition, New York City had an arterial system that was more conducive to automobile traffic than trucks. Because of the limited system of Interstates and the geometric constraints on the parkway system, most of New York City’ truck traffic trav- eled on the arterial street network, much of which is nearly a century old, if not older (New York City DOT 2007a). The study’s key findings included the following: • New York City had designated only five percent of its streets as truck routes. Most of these truck route streets operated at, or near, capacity. Commercial deliveries were essential to the city’s economy; thus, a further reduction in the number of streets in the truck route network was not practical.

Freight Mode Shift Case Studies 145 • The city designed and built its streets to accommodate the trucks and commercial vehicles of 20 to 30 years ago. While New York City can rebuild street segments adjacent to the construc- tion of redevelopment projects to meet design standards for large trucks, similar improve- ments to all of the truck routes were not possible. • Heavy truck traffic had caused damage to residences and roads and contributed to traffic congestion and safety concerns for pedestrians and motorists. While there was an urgent need to alleviate these problems, the economic survival of commercial and industrial areas in the city depended on maintaining a significant level of daily truck activity (New York City DOT 2007a). The study authors did not explicitly mention mode shift as one of the major goals of the study. However, increasing logistics options could imply mode shift. As stated in the executive sum- mary of the study, the broad set of study goals included the following: 1. Ensure that trucks do not inappropriately utilize residential streets. 2. Improve the quality of life for residents and workers in New York City. 3. Increase logistics options that will benefit businesses, transportation providers, and consumers. 4. Improve the economic competitiveness of New York City by enhancing the attractiveness of industrial sites at major distribution points in the city. The new bridge weight regulations applied to the Throgs Neck, Bronx-Whitestone, Triborough, and Verrazano-Narrows Bridges. However, trucks heavier than 80,000 pounds that were not TBTA-approved had to cross the Bronx-Whitestone Bridge, since ongoing exten- sive repair work to the bridge began in 2005. TBTA introduced the new regulation after concern was expressed about stress on the gusset plates that connect the angular steel girders on the Throgs Neck Bridge. However, TBTA officials have repeatedly emphasized that the concerns pose no risk to bridge users. In 2005, when the TBTA first reduced truck weight limits to 80,000 pounds, Thomas Bach, the chief engineer at the TBTA, said “There is no imminent danger [to the Throgs Neck Bridge]. . . . The purpose of what we’re doing here is to prevent the damage from continuing and getting worse” (New York Times 2005). After introducing the new regulations in August 2007, the Metropolitan Transportation Authority Executive Direc- tor Elliot Sander said, “Let me emphasize that the Throgs Neck Bridge is safe to the motoring public” (New York Post 2007). Trucking interests argued that the new nighttime exemption for overweight trucks is of lim- ited use to businesses most affected by the new regulation. Construction activities involving deliveries of rock, gravel, sand, and cement are often restricted from occurring during these hours by local ordinances and safety considerations. Rescheduling deliveries of milk, gasoline, fuel oil and deliveries of other time-critical products to accommodate the new regulations is very difficult and may increase risks to public safety. During the winter, restrictions on time-sensitive deliveries for fuel oil and salt might increase delays and public risks by limiting the deliveries of key materials used in snow removal services (Jack Faucett Associates Inc. 2007a). The stated motivations for the new bridge weight regulations were solely related to safety. None of the interested parties mentioned mode shift. Challenges to Mode Shift The regulation of truck size and weight in the NYMTC region presents major challenges due to the physical limitations of key truck routes. In addition, the large number of over lapping regulatory jurisdictions—including New York City, the state of New York, the Metropolitan Transportation Authority, the New York State Thruway Authority, PANYNJ, and the U.S. DOT—hampers regulation (NYMTC 2014b).

146 Impacts of Policy-Induced Freight Modal Shifts Within New York City, tractor-trailer combination vehicles operating on most truck routes and Interstate highways may not exceed 55 feet in total length. Trucks with 53-foot trailers, which is today’s standard trailer length nationally, may only travel on the portions of I-95, I-695, I-295, and I-495 that cross the city between the Bronx-Westchester County line and Queens- Nassau County line for through movements to and from Nassau and Suffolk counties and are not permitted to serve locations in the five New York City boroughs. This issue represents a cost to shippers and receivers in New York City who must receive shipments by smaller-than- standard tractor-trailer combinations. In practice, tractor-trailers exceeding the 55-foot limit are a frequent sight, serving a range of New York C businesses despite the risk of summons (NYMTC 2014b). Reported instances of bridge strikes, pavement and bridge damage, and the use of improper or unsafe places to park demonstrated the need for improved efficiency in managing truck movements and enforcing regulations. The resources available to law enforcement agencies and the lag in developing and deploying new technologies limit the region’s capacity to enforce the truck route network, truck size and weight, and truck parking and loading regulations (NYMTC 2014b). Policy Results According to an MPO official, mode shift has long been an active policy (Mann 2014). For example, three of the four 2004 regional freight plan recommendations involved improving the reliability of overall movement of freight in the region by • Expanding alternatives for trucks, • Encouraging multimodal shipment, and • Improving the physical infrastructure (NYMTC 2014b). The MPO official pointed out that it is difficult to create mode shift because redundancy in the New York City freight system is virtually nonexistent. There is a lack of rail and water facilities, and many of the boroughs (especially Manhattan and Queens) no longer have working water- fronts or waterfront industry. The MPO official believes that, despite these challenges, mode shift has occurred. He noted that the available data indicate that rail mode share has increased (while cautioning that the data are not strictly comparable across years, and the business cycle complicates comparisons). The official also pointed out that, since the Long Island Railroad sold its service in 1997 to a private operator, the New York and Atlantic Railway, the volume of rail- cars has tripled to 30,000 per year. He also pointed to the growth of intermodal rail in the New York City region and increases in truck weight monitoring through the placement of a weight- in-motion sensor at the I-95 eastbound span into New York City, with the planned addition of two more weight-in-motion sites (Mann 2014). The president of the construction company that led the opposition to the truck weight restric- tions on the TBTA bridges also indicated that the policy had led to mode shift. Although his opposition group had fought the restrictions in court and won some concessions, he reported that the amount of cargo his trucks could move per trip declined from 40 tons to about 34 tons. He estimated that his Long Island market averages about 2 million tons per year. His company moves sand out of Long Island and gravel in from West Nyack, New York. In the past, the com- pany had evenly split the movements between truck and barge-to-truck intermodal. However, the truck weight restrictions on the bridges had caused the company to switch to a mix of 40 per- cent truck and 60 percent barge to truck. He estimated that the switch from truck to barge-to- truck reduced truck mileage per trip from 55 miles each way to 17 miles (Cooney 2014). The company representative also pointed out that the effect of these changes was to raise costs. Trucking costs are higher due to smaller load sizes. Barge to truck is more expensive due

Freight Mode Shift Case Studies 147 to the need to load and reload several times. Barge is also less able to balance and take advantage of the back and forth of the sand versus the gravel, leading to more empty backhauls. The rep- resentative estimated that in most cases his company was able to pass along the increased costs to customers. However, in selected competitive markets, his company had to charge reduced margins (Cooney 2014). Lessons Learned The motivations for this project or policy encompass a variety of goals. These goals include increased safety, improved quality of life, reductions in road wear, and positive contributions to economic competitiveness. While mode shift was not a directly stated goal of the truck route study or the TBTA bridge weight restrictions, restrictions on truck sizes, weights, and routes can raise the cost of trucking, potentially encouraging the shift of some movements from truck to rail or water. Lessons learned fall into three distinct categories: • How and why did mode shift occur? • How did public policy influence this outcome? • How can this policy or program be transferred or adapted to other situations or locations? The initial motivation for the truck route study and bridge weight limits was not to cause mode shift, but to increase safety, advance quality of life, increase logistics options, and improve economic competitiveness. However, as noted above, restrictions on truck sizes, weights, and routes can raise the cost of trucking, potentially encouraging the shift of some movements from truck to rail or water. Moreover, these restrictions, combined with the policies and investments that the regional freight plan championed, were enough to cause modal shift. Public policy, in the form of restrictions on truck sizes, weights, and routes, was the primary driver in causing the mode shift that the government and private business officials observed. Mode shift in an older and dense urban area, with limited space and overcrowded facilities, will always be a challenge. However, the combination of size and weight restrictions along with tar- geted investments and overall freight policy can have an effect. The relatively short urban haul distances and the relatively high costs of transloading will limit the size of this effect. Policy- makers must weigh the positive public policy gains from modal shifts against the increased costs to consumers. Planners, policymakers, and members of the shipper and carrier industry can use the truck route study and bridge weight limits as examples of the kinds of potential tools that are avail- able to influence mode share. Some may deem these policies a success in terms of reduced road damage and improved safety and quality of life. Others will point to the increases in costs to consumers as evidence that these policies represent unnecessary government regulation. Private interests argue that increased government investment in bridge safety and additional truck infrastructure would have a long-term positive economic impact on New York City (Jack Faucett Associates Inc. 2007a, Cooney 2014). Truck size, weight, and route restrictions can raise the cost of trucking, potentially encour- aging the shift of some movements from truck to rail or water. Policymakers seeking the ben- efits of reduced trucking can employ such policies in their urban areas. The positive results can include reductions in road wear, pollutant emissions, noise, and congestion, as well as increased safety and improved quality of life. The negative results can include increased costs to shippers and consumers. Policymakers should be sure to fully evaluate the costs and benefits of each proposed policy and, in particular, be aware of the increased costs of alterna- tive modes.

148 Impacts of Policy-Induced Freight Modal Shifts Epilogue—Recent Developments The most salient freight statistic for New York City is the heavy reliance on trucks, which move almost 90 percent of the city’s freight tonnage. Geography presents a challenge for goods delivery, as trucks can only enter and exit the city via a few bridges and tunnels. Three cross- ings—the George Washington Bridge, the Goethals Bridge, and the Lincoln Tunnel—are the main routes that allow large trucks to enter the city from New Jersey. Moving freight into Brooklyn and Queens usually requires a second crossing over the East River or the Narrows. Industry-standard tractor-trailers have limited access to many of New York City’s roadways due to weight and height restrictions, and commercial traffic is restricted or prohibited on park- ways. As a result, trucks often take inefficient routes. In addition, truck access regulations of New York City and the states of New York and New Jersey sometimes conflict. Most of New York City’s maritime and rail facilities date to the early twentieth century, and the current average life of the city’s bridges exceeds 70 years (PortNYC and NYCEDC 2018). The New York City DOT and other related agencies have focused on freight and have under- taken several large-scale plans and initiatives including the 2015 Urban Freight Initiatives, the Smart Truck Management Plan, New York City DOT Strategic Plan 2016, and Freight NYC. The existing truck route network and the regulations in place today are nearly identical to those put in place in 1981, at the end of the Citywide Truck Studies. Over the past 25 years, there have been some amendments to the route system, although these are local in nature and impact (New York City DOT 2015). In the summer of 2018, New York State Senate Deputy Minor- ity Leader Jeff Klein (D-Bronx) held a meeting about truck weight restrictions. He included New York State DOT Commissioner Astrid Glynn and her senior staff in the meeting. The Commercial Truckers Association and Long Island Contractors Association (LICA) were also participants. The discussion focused on the haphazard weight restrictions of the MTA’s river crossings, particularly the Throgs Neck, Triborough, and Whitestone Bridges. The conversation also covered discrepancies among truck permits of various governmental issuing agencies, such as the state of New York and New York City and other states within the region. The legislator questioned the rationale for the existing weight limits on the MTA crossings. Extensive rehabili- tation projects have been completed on both the Triborough and Whitestone Bridges, and the truck weight limits are set to remain at 80,000 lb. Yet, the Throgs Neck Bridge, which is currently undergoing structural repairs, allows trucks in its center lanes at 105,000 lb. LICA member Matt Metz of Ranco Sand & Gravel Corporation offered another example of the irrational logic. He advised Klein that the Tappan Zee Bridge, which is probably in the poorest condition of any of the metropolitan bridges and now operating beyond its life expectancy, allows 120,000-lb trucks. That bridge is now under study for replacement (LICA 2018). In the last 4 to 5 years, New York City has continued to work toward implementing mode shift strategies. For example, several projects to shift truck traffic onto barges and several other, more general goals to meet the same target, are part of the Freight NYC project that New York City’s Economic Development Corporation is implementing. The development of a marine barge ter- minal at the South Bronx area known as Hunts Point is a key part of the plan. Ryan White, New York City Economic Development Corporation’s director of freight initiatives and ports said he hopes that the Hunts Point project would “jump-start” a harbor barge growth service that would start in the Bronx and expand to a more regional service throughout New York Harbor. Another idea that has a request for proposals circulating would be to find a developer for land near the Sunset Park freight hub and the Brooklyn Army terminal on the East River. Part of that freight hub includes the 65th Street railyard. White said he envisions a joint maritime/rail/truck facility that can take in barge traffic, take railcars floated across the harbor from New Jersey, and ship freight out to parts of the city and Long Island either by truck or by the rail connection at the railyard. That cross-harbor service is the focus of an ongoing Port Authority of New York

Freight Mode Shift Case Studies 149 environmental impact statement. The environmental impact statement is looking to expand the cross-harbor project, either by increasing railcars on barges or by building a long-discussed and ambitious cross-harbor freight tunnel. New York City’s other key rail connection is the revived Staten Island Railroad. It has a con- nection to the “mainland” across the Arthur Kill Vertical Lift Bridge, which crosses the Arthur Kill waterway over to New Jersey. It also connects to the Global Container Terminal (GCT). That terminal sits on land owned by New York City. According to White, “The reactivation has been a good thing for Staten Island in getting trucks off the road” (Kingston 2018). GCT New York on Staten Island is one of two container terminals in the city and the largest in the state. In addition to international freight, GCT New York transfers about half of the city’s volume of solid waste. Barges loaded with containerized municipal solid waste in Queens and Manhattan are unloaded at GCT New York and put on trains. This water-to-rail transfer eliminates over 100,000 truck trips each year. Effective January 2018, the New York City DOT designated a route from the Goethals Bridge to GCT New York to permit trucks hauling sealed shipping containers to oper- ate safely and legally on city streets and highways. Trucks that are up to 73 and 1/2 feet long that are carrying sealed shipping containers and weighing up to 90,000 lb can use this route, making this New York City port regionally and globally competitive (PortNYC and NYCEDC 2018). In addition, New York City DOT implemented new authorized routes and facilities for truckers delivering or picking up cargo at JFK International Airport. New York City DOT authorized the use of combination vehicles with industry-standard 53-foot trailers on Inter- state highway routes direct to JFK. PANYNJ also opened New York City’s first truck stop at the airport, with food, fuel, and parking. The new direct route to JFK’s air cargo facilities provides access across the George Washington Bridge (I-95) from points west and south of New York City and via the New England Thruway (I-95) from points north and east. The route then connects to the Whitestone Bridge and onto the Van Wyck Expressway (I-678) directly into JFK (New York City DOT, Port Authority of New York & New Jersey, and NYCEDC n.d.). Many of the other stated goals of Freight NYC are less specific than steps such as the Hunts Point project. They include setting up a barge council for the region, working to expand barge service not just between New York and New Jersey but also up into New England, and main- taining regular dredging of such local waterways as Flushing Bay or Newtown Creek. “From a public policy perspective in the city, we want to see jobs created, and we want to see trucks off city streets,” White said. “We know the best way to do that is to move freight in railcars” (Kingston 2018). Epilogue—Lessons Learned New York City’s size, geography, and limited transportation infrastructure all contribute to a difficult environment for freight. Truck size and weight policy alternatives are restricted by the policies and politics of multiple jurisdictions, aging and inadequate bridges, safety concerns on local streets, and the lack of alternative freight rail and freight barge infrastructure. New York City policymakers and transportation and economic development agencies have identi- fied these problems and have developed plans and initiatives designed to help ameliorate the shortcomings of the current systems and infrastructure. However, the expected rapid growth of freight movements presents a challenge that is difficult to overcome. However, given the lack of funding for large-scale transformational projects, policymakers and planners must continue to use all of the tools at their command. Some, but not all, of these strategies include the following: • Incremental improvement of rail and water facilities; • Use of improved smarter technology; • Better enforcement; • Partnerships with freight haulers, receivers, and other industry stakeholders;

150 Impacts of Policy-Induced Freight Modal Shifts • Reduction in freight and land-use conflicts; • Improvements in truck access to industrial areas, marine terminals, and airports; • Expansion of off-hour deliveries; and • Exploration of micro freight and waste collection centers. Truck size and weight policy should be an integral item on this list. The goal should be to allow maximum access and efficiency with trucks consistent with safety and protection of infra- structure. The lesson learned is that there is no one easy or grand solution, regardless of price. However, attacking the problem with a thoughtful multi-pronged approach offers hope and a path forward.

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In recent public policy debates, much emphasis has been placed on proposals to shift freight from highways to rail. This emphasis is based on goals of reducing emissions and highway congestion. However, prudent planning requires an understanding of the basics of mode choices, what could change those choices, and what the impacts will be.

The TRB National Cooperative Freight Research Program's NCFRP Research Report 40: Impacts of Policy-Induced Freight Modal Shifts provides public policymakers with the factors that shippers and carriers consider when choosing freight modes and provides an analytical methodology to quantify the probability and outcomes of policy-induced modal shifts.

This is the final report of the NCFRP Program, which ends on December 31, 2019. NCFRP has covered a range of issues to improve the efficiency, reliability, safety, and security of the nation's freight transportation system.

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